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AGO 1958 No. 191 - May 07, 1958
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John J. O'Connell | 1957-1968 | Attorney General of Washington

TAXATION ‑- REFUND TO PRIVATE TRANSPORTATION SYSTEM OF THE AMOUNT OF MOTOR VEHICLE FUEL TAX PAID ON EACH GALLON OF FUEL USED DOES NOT VIOLATE ARTICLE VII, § 5, OF THE STATE CONSTITUTION.

LEGISLATURE ‑- RE‑ENACTMENT [[REENACTMENT]]OF RCW 82.36.275 AUTHORIZING REFUND OF MOTOR VEHICLE FUEL TAX IS NOT A GIVING OF A SUBSIDY BUT MERELY THE EXEMPTION OR EXCLUSION OF SUCH USE OF FUEL FROM THE MOTOR VEHICLE FUEL TAX.

The re‑enactment [[reenactment]]by the legislature of the refund to urban transportation system of motor vehicle fuel tax as provided in RCW 82.36.275 which expires June 30, 1959, would not violate Article VIII, § 5, of the state constitution but constitutes an exception or exclusion from such tax where the refund is paid to private transportation systems.

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                                                                    May 7, 1958

Honorable Daniel J. Evans, Chairman
Subcommittee on City Transit & Motor
Vehicle Exemptions
Joint Fact Finding Committee on Highways,
Streets and Bridges
4323 East 44th Street
Seattle 5, Washington                                                                                 Cite as:  AGO 57-58 No. 191

Dear Sir:

            We have received your oral request for an opinion on the following matter.  The 1957 legislature enacted Senate Bill No. 61 providing refunds to urban transportation systems of the amount of motor vehicle fuel tax paid on each gallon of motor vehicle fuel used.  The Bill (now RCW 82.36.275) by its terms expires June 30, 1959.

            You have inquired whether this act if re‑enacted [[reenacted]]by the 1959 legislature would, in those instances where the refund is paid to private transportation systems, violate Article VIII, § 5, of the state constitution which prohibits the  [[Orig. Op. Page 2]] giving or loaning of the credit of the state to any individual, association, company or corporation.

            Senate Bill No. 61 (RCW 82.36.275) provides that:

            ". . . every urban passenger transportation system shall receive a refund of the amount of the motor vehicle fuel tax paid on each gallon of motor vehicle fuel used, whether such vehicle fuel tax has been paid either directly to the vendor from whom the motor vehicle fuel was purchased or indirectly by adding the amount of such tax to the price of such fuel."

            Your inquiry raises the question of whether this act authorizes the giving of asubsidy of motor vehicle funds measured by the amount of motor vehicle fuel tax paid by municipal and private transportation systems and thereby constitutes a giving of state credit or money to private individuals, associations, companies or corporations in violation of Article VIII, § 5.

                                                                     ANALYSIS

            In our opinion such a bill if re‑enacted [[reenacted]]would not violate Article VIII, § 5, of the state constitution.

            In an opinion of this office addressed to the Honorable Julia Butler Hansen, dated February 7, 1957, we held that Senate Bill No. 61 did not violate the Fourteenth Amendment to the Federal Constitution nor the Eighteenth Amendment to the state constitution.  With reference to the latter provision we there said:

            "We see no constitutional problem presented by Senate Bill No. 61 with respect to amendment 18.  That amendment simply directs that such fees and taxes as are collected by the State from motor vehicle licenses and motor vehicle fuel shall be credited to a special fund and used exclusively for highway purposes as therein defined.  That amendment does not purport to delineate the scope of such taxes, nor does it even direct that such taxes must be imposed.  The rate of such taxes, the subjects to which they apply and the exemptions accorded are all matters for legislative determination."

            In our opinion of February 7, 1957, we thus implicitly held that this provision for a refund to urban transportation systems constituted an exemption or exclusion of such users from the motor vehicle fuel tax rather than a payment of  [[Orig. Op. Page 3]] public moneys in the nature of a subsidy to such transportation systems.

            After reconsideration of this opinion we are not disposed to alter our position.

            Chapter 82.36 RCW provides for several refunds to various classes of fuel users.  Prior to 1957 the refunds were allowed only to persons who purchased such fuels for nonhighway use.  Our court in discussing this system of refunds in Mason-Walsh-Atkinson-Kier Co. v. Case, 2 Wn. (2d) 33, 39, said:

            ". . . It becomes manifest that the legislature of 1933 continued to adhere to the just and reasonable policy which governed its predecessors, to wit: That the burden of special taxes created and imposed to raise funds for the construction and upkeep of the costly and highly specialized highways suitable for motor vehicle trafficought to be borne by those who use the highways for that traffic."  (Emphasis supplied.)

            It is clear from this statement that the court considered the provisions for refunds to nonhighway users not as payments of public moneys to such persons but rather as a means of exempting or excluding such nonhighway use of fuel from the imposition of this excise tax.  It must be assumed that the legislature in providing for refunds rather than initially exempting nonhighway users from payment of the tax intended merely to create practical administrative machinery for carrying out its policy of exempting nonhighway use of fuel from the tax.

            Refunds to urban transportation systems similarly constitute an exemption or exclusion of such use of fuels from the motor vehicle fuel tax and do not constitute the giving of state credit or money to any individual, association, company or corporation.  It is our opinion therefore, that RCW 82.36.275, if re‑enacted [[reenacted]]would not violate Article VIII, § 5, of the state constitution.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

THOMAS R. GARLINGTON
Special Assistant Attorney General

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