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Georgia Motor Trucking Association v. Georgia Department of Revenue

Supreme Court of Georgia

June 5, 2017

GEORGIA MOTOR TRUCKING ASSOCIATION et al.
v.
GEORGIA DEPARTMENT OF REVENUE et al.

          Peterson, Justice.

         In this appeal, we consider the meaning of the phrase "motor fuel taxes" as it is used in a provision of the Georgia Constitution providing that "[a]n amount equal to all money derived from motor fuel taxes received by the state . . . is hereby appropriated . . . for all activities incident to providing and maintaining an adequate system of public roads and bridges in this state[.]" See Ga. Const. of 1983, Art. III, Sec. IX. Par. VI (b) (the "Motor Fuel Provision"). Here, a trucking industry association and three individual motor carriers challenge local sales and use taxes on motor fuels, the revenues of which are not used solely for public roads and bridges. They argue that these taxes fall within the meaning of "motor fuel taxes" under the Motor Fuel Provision and, therefore, the revenues from these taxes (or an amount equal to that revenue) must be allocated to the maintenance and construction of public roads and bridges. We affirm the dismissal of the plaintiffs' complaint because the history and context of the Motor Fuel Provision reveals that "motor fuel taxes" are limited to per-gallon taxes on distributors of motor fuel, and do not include sales and use taxes imposed on retail sales of motor fuels.

         1. Background

         During its 2015 Session, the Georgia General Assembly enacted the Transportation Funding Act of 2015, which amended a variety of provisions related to the funding of transportation infrastructure (including taxes that relate to motor fuel in various ways). See Ga. L. 2015, pp. 236, 241-264, §§ 5-8 ("HB 170").

         Following the passage of HB 170, the Georgia Motor Trucking Association, J&M Tank Lines, Inc., F&W Transportation, and Prolan Logistics, LLC, ("Plaintiffs")[1] filed suit against the Georgia Department of Revenue, Lynnette T. Riley in her official capacity as the State Revenue Commissioner, and Steve McCoy in his official capacity as the State Treasurer (collectively "Defendants").[2] Plaintiffs alleged that HB 170 impermissibly allowed the revenue from local sales and use taxes on the retail sale of motor fuel to be used for purposes other than for building and maintaining public roads. Plaintiffs sought mandamus relief to compel Defendants to use the revenue from these sales and use taxes exclusively for the maintenance and construction of roads and bridge projects (or establish a mechanism to ensure that an amount equal to such funds is so used). Plaintiffs also sought (1) mandamus and extraordinary interlocutory relief to compel Defendants to deposit these revenues into an escrow account pending the litigation, (2) a declaration that HB 170 is unconstitutional, and (3) attorneys' fees.

         The trial court granted Defendants' motion to dismiss, concluding that Plaintiffs' mandamus claims failed because Plaintiffs had an adequate legal remedy to challenge illegally or unconstitutionally assessed and collected taxes under a refund statute, and neither the Commissioner nor the Treasurer had a clear legal duty to monitor or control local spending for roads and bridges or could appropriate state funds to offset local spending of local motor fuel tax revenues. The trial court ruled that mandamus was unavailable because the court would have to oversee and control Defendants' general course of conduct if it granted relief (which is not available in mandamus). The court concluded that the remaining claims were barred by sovereign immunity. The court also concluded in the alternative that, if Plaintiffs' claims were not barred, they nevertheless failed on the merits because HB 170 did not violate the constitutional provision at issue; the challenged sales taxes were not "motor fuel taxes" within the meaning of the Constitution. Plaintiffs then filed this appeal.

         2. Analysis

         The parties raise a number of issues about jurisdiction, procedure, and the merits, but one issue disposes of the whole case. Plaintiffs' mandamus claims are not barred by sovereign immunity. And those claims - like all of Plaintiffs' other claims - fail if local sales and use taxes imposed on the retail sale of motor fuel are not "motor fuel taxes" as that term is used in the Motor Fuel Provision. We conclude that they are not, and thus the trial court properly dismissed Plaintiffs' complaint in its entirety.

         The general rule in Georgia is that "the appropriation for each department, officer, bureau, board, commission, agency, or institution for which appropriation is made shall be for a specific sum of money; and no appropriation shall allocate to any object the proceeds of any particular tax or fund or a part or percentage thereof." Ga. Const. Art. III, Sec. IX, Par. VI (a). But there are exceptions to this general prohibition against earmarking particular revenues for specific purposes, and each exception is laid out in the same paragraph of the Constitution. See Ga. Const. Art. III, Sec. IX, Par. VI (b)-(o). The first of these exceptions is at issue here, and reads in relevant part:

An amount equal to all money derived from motor fuel taxes received by the state in each of the immediately preceding fiscal years . . . is hereby appropriated for the fiscal year beginning July 1, of each year following, for all activities incident to providing and maintaining an adequate system of public roads and bridges in this state . . . .

Ga. Const. of 1983, Art. III, Sec. IX, Par. VI (b). The question we must answer today is whether certain local sales and use taxes on the retail sale of motor fuel are included within the "motor fuel taxes" that this Motor Fuel Provision automatically appropriates for roads and bridges.

         We generally apply the ordinary signification to words in construing a constitutional provision. See Blum v. Schrader, 281 Ga. 238, 239 (1) (637 S.E.2d 396) (2006). This means we afford the constitutional text its plain and ordinary meaning, view the text in the context in which it appears, and read the text "in its most natural and reasonable way, as an ordinary speaker of the English language would." Deal v. Coleman, 294 Ga. 170, 172-173 (751 S.E.2d 337) (2013) (citation omitted). "[W]here a word has a technical as well as a popular meaning, the courts will generally accord to it its popular signification, unless the nature of the subject indicates or context suggests that [the word] is used in a technical sense." Clarke v. Johnson, 199 Ga. 163, 164 (33 S.E.2d 425) (1945); see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 69-77 (2012) (words are to be understood in their ordinary, everyday meanings unless the context shows that they have a technical meaning).

         In understanding a constitutional provision, we must be mindful that "constitutions are the result of popular will, and their words are to be understood ordinarily in the sense they convey to the popular mind." Clarke, 199 Ga. At 164. Accordingly, we must construe a constitutional provision consistent with the meaning of its text at the time it was adopted Collins v Mills, 198 Ga 18, 22 (1) (30 S.E.2d 866) (1944); see also Smith v Baptiste, 287 Ga 23, 32 (2) (694 S.E.2d 83) (2010) (Nahmias, J, concurring) ("Our task in interpreting the Constitution is to determine the meaning of the language used in that document to the people who adopted it as the controlling law of our State.").

A constitutional provision must be presumed to have been framed and adopted in the light and understanding of prior and existing laws and with reference to them. Constitutions, like statutes, are properly to be expounded in the light of conditions existing at the time of their adoption.

Clarke, 199 Ga. at 164. In other words, the constitutional provision at issue here means now what it meant at the time it was enacted. Collins, 198 Ga. at 22 (1). To discern the meaning of "motor fuel taxes" at the time the term entered the Constitution, we must consider the history of taxes on motor fuels and the context that history provided at the time the relevant constitutional provision was adopted.

         A. Statutory and constitutional history of taxes on motor fuels

         (i) Taxes on distributors of motor fuels

         In 1927, the Georgia General Assembly passed an act authorizing state taxes on motor fuels. See Ga. L. 1927, pp. 104, 105-106, §§ 1 and 2. The 1927 Act provided that:

each distributor of fuels who engages in such business in this State shall pay an occupation tax of four cents per gallon, for each and every gallon of such fuels (1) imported and sold within this State, or (2) imported and withdrawn for use within this State, or (3) manufactured, refined, produced, or compounded within this State and sold for use or consumption within this State, or used and consumed within this State by the manufacturer, refiner, producer, or compounder. . . . That the proceeds derived from said tax shall be distributed as follows: Two and one half (2½) cents per gallon to the State-aid fund for use in construction on the State-aid system of roads, and one (1) cent per gallon to the several counties of this State, as ...

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