1 HONORABLE MARSHALL FERGUSON Plaintiffs’ Motion for Summary Judgment Noted with argument: February 7, 2020, at 9 a.m. 2 3 4 5 6 IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON IN AND FOR THE COUNTY OF KING 7 8 9 10 GARFIELD COUNTY TRANSPORTATION AUTHORITY; et al., Plaintiffs, 11 and 12 WASHINGTON ADAPT; TRANSIT RIDERS UNION; and CLIMATE SOLUTIONS, Intervenor-Plaintiffs, 13 14 STATE OF WASHINGTON, 17 18 19 20 21 22 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT v. 15 16 No. 19-2-30171-6 SEA Defendant, and CLINT DIDIER; PERMANENT OFFENSE; TIMOTHY D. EYMAN; MICHAEL FAGAN; JACK FAGAN; and PIERCE COUNTY, Intervenor-Defendants. 23 24 25 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 1 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 I. 2 3 4 INTRODUCTION AND RELIEF REQUESTED Every law we pass, including initiatives, must comply with the Washington Constitution’s “mandatory” 1 substantive requirements, many of which safeguard the integrity of the legislative process. These requirements ensure there is truthful and transparent disclosure of 5 6 7 the contents of proposed legislation and its effect on existing law, and that votes cast for proposed legislation reflect support for only one subject. 8 In addition, the Constitution reflects a profound respect for local home rule particularly as 9 to local taxing and spending decisions. In light of the broad power held by the State Legislature, 10 11 12 the Constitution specifically prohibited the State Legislature from directing local governments and its citizens how to tax and spend for local purposes. Further, the Washington Constitution expressly reaffirms the fundamental right to elections without interference. 13 The sponsors of Initiative 976 (“I-976”) are well aware of these protections (having 14 15 violated many of them in the past), and could have chosen to respect them. Instead, this 16 Initiative flouts the Constitution at virtually every turn. The fact that a statewide majority 17 adopted the initiative does not make it lawful; indeed, voters were never given the opportunity to 18 truly express their will because of the many constitutional violations embedded in the question(s) 19 put to them. 20 This Court is aware of the false and misleading nature of the initiative’s ballot title, 21 22 having already ruled that Plaintiffs are likely to prevail on their article II, section 19 subject-in- 23 title claim. The Court should confirm this violation, as the title misrepresents the content of the 24 Initiative, most significantly by stating that locally approved transportation taxes would remain 25 intact and an option for the future, when this is not true. At the same time, the ballot title fails to 26 27 1 Const. art. I, § 29. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 2 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 mention critical subjects in addition to establishing $30 car tabs (which the Initiative, in fact, 2 does not do), particularly the attempt to compel retirement of Sound Transit’s outstanding bonds 3 at a cost of hundreds of millions of dollars. Because I-976 contains multiple subjects that are not 4 germane to one another, it additionally violates the single subject provision of article II, section 5 6 19. The initiative also patently contravenes article II, section 37 by amending statutes without 7 setting them out (or even mentioning them) creating confusion about its impact. This violation is 8 most obvious with respect to sections of the local transportation benefit district statute, which are 9 not mentioned in the initiative at all, but which the State concedes must no longer be in effect 10 (and if they were, they would create an additional, significant misrepresentation in the ballot 11 title). 12 The Initiative’s flaws extend beyond these defects because it upends the system of home 13 14 rule, inserting the State into local government decisions about how to tax and spend to address 15 local concerns. From Spokane to Vancouver to Burien, the Initiative attempts to summarily halt 16 ongoing local road and transit projects by eliminating locally approved taxes dedicated to local 17 projects. In Seattle, I-976 even attempts to overturn an earlier popular vote approving those local 18 19 taxes for a local project. Overall, the Initiative would haphazardly relocate taxes and revenue with devastating effects to all Washingtonians who rely on transit, highways, safe roads and 20 21 22 23 sidewalks. I-976 is facially unconstitutional on multiple, alternative grounds. This Court should enter a declaration invalidating the Initiative, and permanently enjoin it from taking effect. 24 25 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 3 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 II. A. 3 STATEMENT OF FACTS Transportation Benefit Districts Rely on Local Vehicle License Fees to Fund Vital Transportation and Transit Projects. 4 More than 60 Washington cities collect Vehicle License Fees. 5 Washington cities, towns, and counties have been authorized to establish 6 Transportation Benefit Districts (“TBDs”) to generate revenue for specific local transportation 7 projects. See generally ch. 36.73 RCW. To generate local revenue for these projects, the 8 9 Legislature has vested TBDs with independent taxing authority, which includes a voted sales tax and local vehicle license fees. RCW 36.73.040. In Fiscal Year 2018, the State 10 11 12 13 Department of Licensing (“DOL”) and its agents collected $58,186,839 in Vehicle License Fee (“VLF”) revenue for local TBDs. 2 See Dkt. No. 24, Ex. F; Declaration of Peter King (“King Decl.”), ¶ 6. 3 14 15 16 Local VLF revenue can be initiated in either of two ways: RCW 82.80.140 confers authority for TBD governing bodies to enact VLFs of up to $50 (approved by local representatives), while voter-approved charges may bring the total up to $100. More than 17 sixty TBDs throughout Washington currently utilize local TBD authority to collect VLFs 18 19 ranging from $20 to $80 per vehicle registration. 4 See King Decl., ¶ 5. For example, the 20 Vancouver TBD currently collects a VLF in the amount of $40 per registration, which 21 amounts to approximately $5 million annually. Declaration of Ryan Lopossa (“Lopossa 22 Decl.”), ¶¶ 3-4. The Vancouver TBD uses its VLF revenue both as a major funding 23 24 25 26 27 2 DOL collects revenues and processes applications for all vehicle title and registration transactions statewide. See ch. 46.01 RCW. DOL collects all state and local vehicle-related fees, including VLFs implemented by TBDs; taxes, including the motor vehicle excise tax; other general fees and charges, including filing fees, service fees, registration fees, tab reflectivity fee, license plate technology fee, license service fee; special fees such as outstanding parking surcharge fee, license plate transfer fee, electrification fee, and personalized license plate fee; and any sales or use tax due. See generally ch. 46.16A RCW (vehicle registration); ch. 46.17 RCW (vehicle fees). 3 Available at https://www.awb.org/file_viewer.php?id=21046 (last visited Jan. 9, 2020). 4 https://www.dol.wa.gov/vehicleregistration/localfees.html (last visited Jan. 9, 2020). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 4 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 component for transportation improvement projects (such as important upgrades to 2 substandard streets) and as a necessary local match for state and federal grants that fund its 3 Transportation Improvement Program. Id., ¶¶ 1, 6. Similarly, the City of Spokane uses its 4 local TBD authority to collect a $20 VLF per registration, amounting to approximately $3 5 6 million annually. Declaration of Scott M. Simmons (“Simmons Decl.”), ¶ 4. The bulk of 7 Spokane’s VLF funding is dedicated to residential street improvements, with the remainder 8 earmarked to implement pedestrian projects such as sidewalks. Id. 9 In addition to the VLFs discussed above, the City of Seattle has a voter-approved VLF in 10 place. In July 2014, Seattle passed Resolution 12, which placed on the ballot a measure seeking 11 voter authorization for a $60 VLF and 0.1% sales tax increase to generate over $50 million 12 annually to improve transit service and access for six years. Dkt. No. 19 (VerBoort Decl., ¶ 3 & 13 14 Ex. A). In November 2014, 62.43 percent of Seattle voters approved STBD Proposition 1 to 15 purchase increased Metro service and additional transit programs for Seattle residents. Id., ¶ 3 & 16 Ex. B. About 45% of the Proposition 1 revenue comes from a $60 VLF, meaning these voter- 17 approved fees result in revenue of $24 million per year. Id., ¶ 5 & Exs. D, E. 18 19 As discussed below, section 6 of I-976 repeals TBDs’ authority to charge VLFs. If TBD VLF revenues are eliminated, major planned transportation projects would go unfunded, 20 21 22 23 24 25 26 27 existing and ongoing projects would at best be delayed and at worst left incomplete, and the ability to pursue grant funds requiring a local match would be diminished or eliminated. See Lopossa Decl., ¶ 6; Simmons Decl., ¶ 4; Dkt. No. 19 (VerBoort Decl., ¶ 5). The City of Burien has pledged VLF funds to repayment of bonds issued to fund major transportation improvements. VLF revenue is also pledged to repayment of bonds. King Decl., ¶ 11 & Ex. D. As a prominent example (since I-976 would impair these bonds), in July 2009, the Burien City PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 5 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 Council established the Burien Transportation Benefit District No. 1 (“TBD No. 1”) for the 2 purpose of financing, constructing, and otherwise facilitating citywide street improvements (the 3 “Project”). See Declaration of Eric Christensen (“Christensen Decl.”), ¶ 4 & Ex. A. Burien 4 determined that it was in the best interests of its citizens to issue limited tax general obligation 5 6 bonds (the “Bonds”) to finance the Project. Id., ¶ 5. In July 2010, the governing board of TBD 7 No. 1 passed a resolution approving an Interlocal Agreement with Burien, authorizing TBD No. 8 1 to impose and collect a $10 VLF, and pledging the VLF revenues toward payment of the 9 Bonds (the “Resolution”). Id. & Ex. B, §§ 1, 3. Under the Interlocal Agreement, TBD No. 1 10 11 pledged to impose and collect the VLF and to dedicate the revenue to debt service on the Bonds “so long as the [Bonds] issued by Burien for the purpose of financing the Project remain 12 outstanding.” Id., ¶ 6 & Ex. C, §§ 2.1, 4. In turn, Burien pledged to deposit VLFs received from 13 14 TBD No. 1 into a debt service fund established for the Bonds. Id., §§ 3.3, 4. The parties further 15 agreed that “[s]uch pledge will be material to the offer and sale of the Bonds, and will be 16 disclosed to potential purchasers and purchasers of the Bonds,” and that “[b]ondholders will rely 17 on this pledge in purchasing the Bonds.” Id., § 4. 18 19 In July 2010, the Burien City Council adopted Ordinance No. 544 (the “Ordinance”) authorizing Burien to issue the Bonds in the aggregate amount of $8,900,000 to finance the 20 21 22 Project. Id., ¶ 7 & Ex. D. The Ordinance also pledged the VLF revenue to repay the Bonds. Id., § 10. Before selling the Bonds, Burien prepared an Official Statement describing all aspects of 23 the proposed bond sale, including the obligation to use TBD No. 1’s VLF revenues to repay the 24 Bonds. Id., ¶ 8 & Ex. E at 4-5 (TBD No. 1 “has covenanted and agreed to collect the TBD 25 Revenue so long as the Bonds remain outstanding” and such TBD revenue “has been pledged by 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 6 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 [Burien] toward the payment of the principal of and interest on the Bonds.”). Burien provided 2 the Official Statement to enable investors to determine whether to purchase the Bonds. Id. 3 4 In August 2010, Burien executed a contract to sell the Bonds to a bond investment underwriting firm for offering to the public. Id., ¶ 10 & Ex. G. 5 The Bonds became legal, valid, 5 6 and binding obligations of Burien at the time they were delivered by Burien to the underwriter 7 and paid for by the underwriter. Id. Burien intended for bondholders to rely upon TBD No. 1’s 8 promise to impose and collect the VLF for the life of the Bonds, as well as Burien’s pledge of 9 that VLF revenue as security, as an important part of the financial framework that induced them 10 11 to purchase the Bonds. Christensen Decl., ¶ 11; Declaration of Richard Schober (“Schober Decl.”), ¶ 6. The last maturity date of the Bonds is December 1, 2029. Christensen Decl., ¶ 10. 12 13 B. Local Governments Receive Significant State Funding for Transportation and Transit Through the Multimodal Account and Other Accounts Impacted by I-976. 14 Washington municipalities have limited revenue source options, which are insufficient to 15 fund fully local transit and transportation improvements. To make up some of the difference, the 16 State funds the Multimodal Account to provide support for all types of transportation projects 17 18 and programs including highway preservation and public transportation. See RCW 47.66.070. 19 This critical account funds local programs such as: Regional Mobility Grant Program, Rural 20 Mobility Grant Program, Highway Safety, Puget Sound Ferry Operating and Capital Programs, 21 Washington State Patrol, Rail Capital and Operating, Transportation Improvement Board, Safe 22 Routes to School, and direct allocations to counties and cities. See Dkt. No. 24, Ex. E. 23 The major sources contributing to the Multimodal Account include motor vehicle fuel 24 taxes (the “gas tax”); vehicle-related licenses, fees and permits; driver-related fees and charges; 25 26 27 5 Moody’s Investors Service assigned a rating of A1 to the Bonds in August 2010. Christensen Decl., ¶ 9 & Ex. F. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 7 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 user charges (ferry fares, tolls); and sales and use tax. Id. The Office of Financial Management 2 (“OFM”) estimates I-976 will have a $1.5 billion impact over the next six years to this account. 3 That estimate does not include any costs for project delays, restructured or delayed financing, 4 and importantly, the loss of the .3% motor vehicle sales tax revenue. Dkt. No. 11, Ex. B. 5 Beyond the Multimodal Account, the State has a variety of other accounts it funds to 6 7 support transit and transportation improvements. Dkt. No. 24, Ex. E. In the 2017-19 8 transportation budget, vehicle licenses, permits and fees accounted for 15% of the revenue for 9 these other accounts. Id. I-976 would eliminate substantial sources of funding for these 10 11 accounts with significant impacts on local communities. See Dkt. No. 17, ¶ 9; see also Simmons Decl., ¶¶ 5-9 (specific anticipated impacts in City of Spokane). 12 13 I-976 Reduces Funding for Transportation Projects Statewide Despite Being Rejected In Several Jurisdictions. 14 A group of private sponsors including intervenor Tim Eyman drafted I-976 and filed it 15 16 with the Secretary of State in March 2018. Dkt. No. 40, ¶ 2. The Initiative was certified in January 2019, see id. ¶ 5, and approved by voters in the November 2019 general election. 6 17 I-976 will substantially decrease the amount of funding available for transportation 18 19 projects statewide, including many projects that are critical from a public safety standpoint. In 20 light of the pending implementation of I-976, Governor Inslee advised WSDOT of the need to 21 postpone all projects not yet underway, and the State identified a list of such projects. See Dkts. 22 No. 24, Ex. H & 58; King Decl., ¶ 15. Other state agencies that receive transportation funding, 23 including the Washington State Patrol and Department of Licensing, also will be required to 24 defer all non-essential spending. Dkt. No. 24, Ex. H. According to the Governor, it is “clear that 25 26 6 27 https://results.vote.wa.gov/results/current/State-Measures-Initiative-Measure-No-976.html (last visited Jan. 9, 2020). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 8 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 this vote [in favor of I-976] means there will be adverse impacts on our state transportation 2 system.” Id. 3 4 Although I-976 received 52.99% of the statewide vote, it was rejected by large majorities in several jurisdictions. 7 For example, 76% of Seattle voters rejected the Initiative, with over 5 6 90% of some Seattle precincts voting no. 8 In King County, 59.5% of voters rejected the 7 Initiative. 9 I-976 was also rejected in Whatcom, Thurston, Jefferson, Island and San Juan 8 Counties by majorities ranging from 50.6% to over 70%. 10 Within the Sound Transit district 9 (covering portions of King, Pierce, and Snohomish Counties), voters rejected I-976 by 10 11 approximately 54%. 11 I-976 thus subverts the expressed will of local voters in these jurisdictions. 12 I-976 Covers a Hodgepodge of Unrelated Subjects. 13 I-976 purports to cap vehicle license tabs at $30—but it neither accomplishes that task 14 15 nor limits its reach to that subject. The self-proclaimed title of I-976 is “Bring Back Our $30 Car 16 Tabs.” Dkt. No. 24, Ex. A at § 17. The following ballot title was placed before the voters: 17 Initiative Measure No. 976 concerns motor vehicle taxes and fees. 18 This measure would repeal, reduce, or remove authority to impose certain vehicle taxes and fees; limit annual motor-vehicle-license fees to $30, except voterapproved charges; and base vehicle taxes on Kelley Blue Book value. 19 20 Id., Ex. B. 21 22 23 24 25 26 27 7 https://results.vote.wa.gov/results/current/State-Measures-Initiative-Measure-No-976_ByCounty.html (last visited Jan. 9, 2020). 8 https://results.vote.wa.gov/results/current/State-Measures-Initiative-Measure-No-976.html as of 1/5/20 (searching by precincts SEA); see also https://www.seattletimes.com/seattle-news/politics/majority-of-voterspaying-sound-transits-car-tab-taxes-opposed-i-976/ (last visited Jan. 9, 2020). 9 See supra n. 7; see also https://www.seattletimes.com/seattle-news/politics/majority-of-voters-paying-soundtransits-car-tab-taxes-opposed-i-976 (last visited Jan. 9, 2020). 10 See supra n. 7. 11 See supra n. 7-8. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 9 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 4 I-976 limits car tab fees by limiting or repealing multiple fees and taxes. The stated purpose of I-976 based upon its text is to “limit state and local taxes, fees, and other charges relating to motor vehicles.” Dkt. No. 24, Ex. A at § 1. Specifically, I-976 claims that it “limit[s] annual motor vehicle license fees to $30, except voter approved charges.” Id. I- 5 976 adds a new section to chapter 46.17 RCW that imposes a hard cap on vehicle registration 6 7 and annual renewal fees: “State and local motor vehicle license fees may not exceed $30 per year 8 for motor vehicles, regardless of year, value, make, or model.” Id. at § 2(1). The term “‘state 9 and local motor vehicle license fees’ means the general license tab fees paid annually for 10 11 12 licensing motor vehicles . . . and do not [sic] include charges approved by voters after the effective date of this section.” Id. at § 2(2) (emphasis added). The $30 motor vehicle license fee restriction applies to “initial” registration and each annual “renewal vehicle registration.” Id. 13 14 Sections 3 and 4 of I-976 set the vehicle license fee at $30 for many non-commercial 15 vehicles. Id. at §§ 3, 4. Although I-976 directly addresses some general license registration fees 16 in chapter 46.17 RCW, it is silent on others. In addition to limiting the vehicle license fee to $30 17 for many vehicles, I-976 also eliminates the electric vehicle mitigation fee established by 18 RCW 46.17.323. Id. at § 5. Under existing law, this mitigation fee was imposed to address “the 19 impact of vehicles on state roads and highways and for the purpose of evaluating the feasibility 20 of transitioning from a revenue collection system based on fuel taxes to a road user assessment 21 22 23 system.” RCW 46.17.323(3)(a). It is “separate and distinct from other vehicle license fees.” Id. Under the heading, “Repeal and Remove Authority to Impose Certain Vehicle Taxes and 24 Charges,” section 6 of I-976 repeals a number of statutes in total. Dkt. No. 24, Ex. A at § 6. 25 Relevant here, I-976 repeals RCW 46.17.365 and RCW 46.68.415, which required payment of a 26 “weight fee in addition to all other taxes and fees required by law,” authorized WSDOT to adopt 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 10 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 rules for determining the weight of certain vehicles, and established deposit procedures. Id. at § 2 6(1), (2). 3 Section 7 amends RCW 82.08.020. The amendment would eliminate an additional .3% 4 sales tax on vehicle sales. Segal Decl., Ex. A at § 7. Section 8 adds a new section to chapter 5 6 82.44 RCW, which states that “[a]ny motor vehicle excise tax” must be calculated using the 7 “base model Kelley Blue book value.” Id. at § 8. Section 9 amends RCW 82.44.065 with 8 respect to the use of this new Kelley Blue Book valuation method. Id. at § 9. 9 10 11 Section 10 amends RCW 81.104.140, which addresses dedicated funding sources for high capacity transportation services. Id. at § 10. The amendments purport to preclude regional transit authorities (“RTAs”), such as Sound Transit, from levying and collecting the special 12 motor vehicle excise tax (“MVET”) authorized by RCW 81.104.160. Id. Section 11 then 13 14 purports to repeal both RCW 82.44.035, which established the current method of valuing 15 vehicles for MVET purposes, and RCW 81.104.160, which (1) authorized RTAs covering 16 counties with populations exceeding 1.5 million people to collect an MVET of up to .8% when 17 approved by voters and (2) authorized “[a]n agency and high capacity transportation corridor 18 19 area” to impose a rental-car tax of up to 2.172%. Id. at § 11. Although repealed under section 11, RCW 81.104.160 is also amended by section 13 to 20 21 22 purportedly reduce the authorized MVET to .2%. Id. at § 13. The question of which section prevails over the other is not clear. Sound Transit, an RTA pursuant to the above statutes, 23 currently imposes both MVETs and rental-car taxes under RCW 81.104.160 to fund its regional 24 transit projects. See Declaration of Tracy Butler (“Butler Decl.”), ¶¶ 2-3. Assuming that I-976 25 repeals RCW 81.104.160, the result would be a $2.3 billion reduction in Sound Transit’s funding 26 between 2020 and 2026. Id., ¶ 26. 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 11 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 Despite the stated exception for “voter approved charges,” I-976 eliminates voters’ ability to approve future charges or retain current ones. 2 3 I-976’s ballot title indicated that the Initiative would “limit annual motor-vehicle-license 4 fees to $30, except voter-approved charges.” Dkt. No. 24, Ex. B (emphasis added). Contrary 5 to that language, however, I-976 in fact repeals authority for multiple voter-approved charges. 6 First, I-976 repeals RCW 82.80.130, which allowed Public Transportation Benefit Areas to 7 8 submit a proposed MVET of up to .4% to voters for passenger ferry service. Dkt. No. 24, Ex. A at § 6(3). 9 10 11 Second, with respect to TBDs, I-976 repeals RCW 82.80.140, which authorized TBDs to impose an annual VLF not to exceed $100 for each vehicle. Id. at § 6(4); see also supra, Section 12 II.A. Because the complete repeal of RCW 82.80.140 leaves TBDs without the option to collect 13 any VLF, voters thus have no means to impose additional VLFs in excess of the $30 cap. 14 Likewise, I-976 causes any existing VLF to be eliminated due to the repeal of RCW 82.80.140, 15 including the voter-approved City of Seattle VLF. 16 I-976 addresses future actions with respect to Sound Transit bonds. 17 18 19 Section 12 of I-976 adds a new section to chapter 81.112 RCW, which states that any RTA collecting the MVET authorized under RCW 81.104.160 “must fully retire, defease, or 20 refinance any outstanding bonds” if MVET revenues are pledged to repay the bonds and 21 defeasement or retirement is possible under the bond terms. Id. at § 12. This provision is not 22 mentioned in I-976’s ballot title. 23 24 By its terms, section 12 is and can only be specifically directed at Sound Transit. Sound Transit has issued bonds to fund regional transit projects and has pledged the MVET as security 25 26 27 for those bonds. Butler Decl., ¶ 13. In Pierce Cty. v. State, 159 Wn.2d 16, 27-38, 148 P.3d 1002 (2006) (Pierce Cty. II), the Supreme Court recognized the nature of the MVET as bond security PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 12 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 and held that I-776’s repeal of the MVET unconstitutionally impaired Sound Transit’s bonds to 2 which the MVET was pledged. Section 12 of I-976 is specifically targeted toward the bonds 3 addressed in Pierce Cty. II. In other words, in recognition that outright repeal of pledged 4 MVETs is impermissible under Pierce Cty. II, I-976 attempts to achieve the same result by 5 6 forcing early retirement, defeasance, or refinancing of the bonds. To retire, 12 defease, 13 or refinance 14 bonds, would mean to borrow additional funds, pay 7 8 additional financing costs, and collect additional MVETs, rental-car taxes, sales and use taxes, 9 and property taxes. Butler Decl., ¶¶ 17, 23. The direct immediate cost to retire, defease, or 10 11 refinance Sound Transit’s debt obligations to comply with section 12 of I-976 would be a minimum of $521 million. Id., ¶ 24. 12 I-976 makes implementation contingent on RTA actions, requires liberal interpretation, and provides for severability. 13 14 15 Section 16 of I-976 establishes an effective date for certain sections of the Initiative. Dkt. No. 24, Ex. A at § 16. Under this section, sections 10 and 11 take effect on the date that the 16 RTA complies with section 12 of I-976. Id. But section 13 takes effect April 1, 2020, if sections 17 18 19 10 and 11 have not taken effect by March 31, 2020. Id. The RTA is supposed to inform authorities on effective dates. Id. 20 21 22 23 24 25 26 27 12 “Retire” means to redeem the bonds from the bond owners or repay the bond owners for the face value (principal balance) of the bonds. Bonds can be redeemed at the bond maturity date or on or after the first optional bond redemption date, if the bond agreement permits optional redemption before the maturity date. Not all Sound Transit bonds are subject to optional redemption. Because retirement only occurs at maturity or on optional redemption dates, Sound Transit does not have the option to retire most of its bonds in the immediate future. Butler Decl., ¶ 18-19. 13 “Defease” means to set aside cash or other assets which will provide bondholders with the revenue stream sufficient to pay interest and principal when due, as promised in the original bond contract, thereby permitting the issuer to remove the debt from its balance sheet. Generally, an essential element of defeasance includes selling refinancing bonds to pay for the defeasance; however, a defeasance can be accomplished with available cash reserves negating the need for a refinancing bond issue. Id., ¶ 20. 14 “Refinance” means to issue new debt, the proceeds of which are used to replace bonds that are currently callable, or to accomplish a defeasance to pay principal and interest on the existing bonds until the earlier of their maturity date or the first optional redemption date. Id., ¶ 21. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 13 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 Finally, section 14 of I-976 requires liberal construction “to effectuate the intent, policies, and purposes of this act.” Id. at § 14. Section 15 provides for severability. Id. at § 15. 3 I-976’s Sponsor Shopped for the Most Favorable Ballot Title to Deceive the Voters. 4 The history of I-976’s ballot title makes apparent that its sponsor shopped for and 5 affirmatively chose the most misleading title. In 2018, Tim Eyman filed a total of 13 initiatives 6 7 intended to “bring back [] $30 car tabs”: six to the legislature, including I-976, and another six to 8 the people. Declaration of David J. Hackett (“Hackett Decl.”), Ex. 8 (initiatives); Dkt. No. 24, 9 Ex. A (I-976). The substance of all 13 initiatives was largely the same. Id. The Attorney 10 General drafted official ballot titles for nine of those initiatives. Hackett Decl., Ex. 9; Dkt. No. 11 24, Ex. A. 15 12 Despite the substantive similarities in the bodies of the initiatives, their ballot titles 13 14 differed in two major ways. First, while the ballot titles for six of the initiatives stated only that 15 the measures would “repeal, reduce, or remove authority to impose certain vehicle taxes and 16 fees,” three went on to state that the repeal of authority specifically “includ[ed] charges funding 17 mass-transit or regional transportation.” See Hackett Decl., Ex. 9 (compare ballot titles for I- 18 969, I-976, I-1585, I-1591, I-1610, & I-1618 with ballot titles for I-967, I-975, & I-1626) 19 (emphasis added). Second, the ballot titles for six initiatives indicated that the measures would 20 “limit motor-vehicle-license fees to $30, except voter-approved charges,” but for three of the 21 22 measures the ballot title stated only that the $30 cap on car tabs had unnamed “exceptions.” Id. 23 Eyman thus had his pick of ballot titles. In ultimately pursuing I-976, he chose one that 24 both omitted material information (that the initiative repealed the authority to collect revenue to 25 fund mass transit systems statewide, e.g., the MVET, and in fact purported to require retirement 26 27 15 Eyman withdrew four of the 13 initiatives, which are not discussed here. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 14 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 of Sound Transit’s bonds) and explicitly promoted false information (that it exempted existing 2 and future voter-approved charges from the $30 cap on license fees). Eyman filed, but later 3 withdrew, a ballot title challenge to the ballot title and summary for I-976. Dkt. No. 40, ¶ 3. The 4 withdrawn challenge, however, accepted as appropriate the “except voter-approved charges” 5 6 language. Eyman affirmatively chose and agreed to the misleading ballot title the Attorney 7 General drafted (which language also was substantially drawn from the text of section 1 of the 8 initiative). 9 Procedural History. 10 11 12 I-976 was approved by voters on November 5, 2019. Except for sections attempting to implement different effective dates as set forth in section 16, I-976 was scheduled to take effect on December 5, 2019. See Const. art. II, § 1(d). On November 8, 2019, Plaintiffs made a 13 14 demand on Attorney General Bob Ferguson to investigate the constitutional violations arising 15 from I-976 and to initiate legal proceedings on behalf of all Washington taxpayers. See Dkt. No. 16 24, Ex. I. Attorney General Ferguson declined to do so. See id. On November 14, 2019, 17 Plaintiffs filed a complaint for declaratory and injunctive relief seeking to invalidate I-976 on 18 multiple constitutional grounds and enjoin it from taking effect. See Dkt. No. 1. 19 Plaintiffs filed a motion for preliminary injunction on November 18, requesting that the 20 Court prevent I-976 from taking effect pending resolution of this litigation on grounds the 21 22 Initiative is unconstitutional and, if implemented, would cause immediate, devastating, and 23 irreparable impacts statewide. See Dkt. No. 28. 16 This Court granted Plaintiffs’ motion on 24 November 27, 2019. In doing so, the Court found that I-976, if implemented, would result in 25 immediate and irreparable harms to Plaintiffs including reduction in transit service, loss of grant 26 27 16 The State opposed Plaintiffs’ motion. See Dkt. No. 42. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 15 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 funding, loss of VLF revenue and resulting transportation funding deficiencies, and reduction in 2 funding to the State’s Multimodal Transportation Account with resulting reduction or 3 elimination of services funded thereby. See Dkt. No. 63 at 2-4. The Court concluded Plaintiffs 4 were “likely to prevail on the merits of their constitutional challenge to I-976 based upon Article 5 6 II, Section 19 of the Washington Constitution,” that implementation of an unconstitutional 7 initiative would result in actual and substantial injury to Plaintiffs and invade their constitutional 8 rights, and that the harm to Plaintiffs if I-976 was implemented outweighed any harm to the State 9 and the public if the Initiative was stayed. Id. at 5-7. 10 11 Following the preliminary injunction proceedings, Plaintiffs filed an amended complaint adding the City of Burien and Justin Camarata as Plaintiffs. See Dkt. No. 118. Several 12 additional parties have since intervened, including new plaintiffs Washington ADAPT, Transit 13 14 Riders Union, and Climate Solutions. The Court also allowed Clint Didier, Permanent Offense, 15 Tim Eyman, Michael Fagan, Jack Fagan, and Pierce County to intervene as Defendants. See, 16 e.g., Dkt. Nos. 101, 114-16. 17 18 19 III. A. STATEMENT OF ISSUES Does the I-976 ballot title violate article II, section 19 subject-in-title requirements because it deceives voters with the misrepresentations that “voter approved charges” are an 20 21 22 exception to the $30 cap on motor vehicle license fees, and that voters will pay no more than $30 when licensing a vehicle? 23 B. Does the I-976 ballot title violate article II, section 19 subject-in-title requirements 24 because it fails to include numerous necessary subjects and does not prompt inquiry into those 25 omitted subjects? 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 16 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 C. 2 combines multiple subjects that are not germane to each other? 3 D. Does I-976 violate the article II, section 19 single subject requirements because it Does I-976 violate article II, section 37 by amending existing statutes without setting the 4 amendments forth in full, thereby resulting in confusion as to the effect of the new law? 5 6 E. Does I-976 violate article XI, section 12 by depriving municipal governments of vested 7 local taxing authority for local purposes prior to expiration of the local tax? 8 F. 9 votes and diluting the voice of local voters on matters of local concern? 10 11 G. Does I-976 violate article I, section 19 by using a statewide vote to override existing local Does I-976 violate article VII, section 5 by diverting tax dollars from the purposes approved by local voters? 12 H. Does I-976 violate article I, section 23 by impairing bond obligations? I. Does I-976 violate Washington’s separation of powers doctrine by intruding on the 13 14 15 executive function of administering bond repayment? 16 J. 17 delegating legislative functions regarding the effective dates of laws and the legal force of certain 18 19 Does I-976 violate Washington’s separation of powers doctrine by unconstitutionally statutes to the discretionary decisions of a municipal government? K. Does I-976 violate article I, section 12 by conferring a special privilege on a private 20 21 corporation by requiring DOL to use the Kelley Blue Book valuation product? IV. 22 EVIDENCE RELIED UPON 23 Plaintiffs’ Motion relies upon the Washington State Constitution, the supporting 24 Declarations of Peter King, Ryan Lopossa, Scott Simmons, Tracy Butler, Richard Schober, Eric 25 Christensen, and David J. Hackett, the exhibits to the Declarations, and the pleadings, papers, 26 and records on file in this matter. 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 17 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 V. 2 The Court Should Invalidate I-976. 3 While “the people exercise the same power of sovereignty as the Legislature” when they 4 ARGUMENT AND AUTHORITY exercise the initiative power, they are also “subject to the same constitutional restraints.” City of 5 6 7 Burien v. Kiga, 144 Wn.2d 819, 824, 31 P.3d 659 (2001). “Consequently, even though an initiative passes by the majority of the voters, it will be struck down if it runs afoul of 8 Washington’s constitution.” Id; accord Amalgamated Transit Union Local 587 v. State, 142 9 Wn.2d 183, 204, 11 P.3d 762 (2000) (“ATU”). Indeed, courts routinely invalidate duly passed 10 11 12 initiatives that run afoul of the Constitution. See, e.g., Lee v. State, 185 Wn.2d 608, 629-30, 374 P.3d 157 (2016) (affirming trial court judgment striking down Initiative 1366); City of Burien, 144 Wn.2d at 828 (affirming trial court judgment invalidating Initiative 722); ATU, 142 Wn.2d 13 14 15 at 256-57 (affirming trial court judgment declaring Initiative 695 unconstitutional). Although Plaintiffs have to demonstrate I-976’s unconstitutionality “beyond a reasonable 16 doubt,” the term “in this context merely means that based on [the court’s] respect for the 17 legislature, [it] will not strike a duly enacted statute unless . . . fully convinced, after a searching 18 legal analysis, that the statute violates the constitution.” Sch. Dists.’ All. for Adequate Funding 19 of Special Educ. v. State, 170 Wn.2d 599, 606, 244 P.3d 1 (2010) (internal quotations omitted). 20 “The assumption is that the Legislature considered the constitutionality of its enactment and thus 21 22 should be afforded some deference.” State ex rel. Peninsula Neighborhood Ass’n v. Wash. State 23 Dep’t of Transp., 142 Wn.2d 328, 335, 12 P.3d 134 (2000). Nonetheless, it is “ultimately” the 24 prerogative of the “judiciary” to “make the decision, as a matter of law, whether a given statute 25 is within the legislature’s power to enact or whether it violates a constitutional mandate.” Island 26 Cty. v. State, 135 Wn.2d 141, 147, 955 P.2d 377 (1998) (citing Marbury v. Madison, 5 U.S. (1 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 18 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 Cranch) 137, 176-80, 2 L. Ed. 60 (1803)). Here, applying a “searching legal analysis,” I-976 2 violates multiple provisions of the Constitution and thus should be struck down. 3 4 The I-976 Ballot Title Violates Article II, Section 19’s “Subject in Title” Requirement. 5 I-976 violates the subject in title requirement of article II, section 19 for two independent 6 7 8 reasons: first, because the ballot title substantially misleads voters; second, because it fails to disclose its multiple subjects. The “purpose” of the subject in title requirement is to “notify members of the Legislature and the public of the subject matter of the measure.” ATU, 142 9 10 11 Wn.2d at 207. The “particular importance of this requirement in the context of an initiative” is that voters often do not read the “text of a measure or the explanatory statement,” but “instead 12 cast their votes based upon the ballot title.” Id. at 217. A measure with a false and misleading 13 ballot title fails constitutional requirements because it deceives voters. See Wash. Ass’n for 14 Substance Abuse & Violence Prevention v. State, 174 Wn.2d 642, 660, 278 P.3d 632 (2012) 15 (“[T]he material representations in the title must not be misleading or false, which would thwart 16 the underlying purpose of ensuring that no person may be deceived as to what matters are being 17 18 legislated upon.” (internal quotations omitted)). Moreover, a ballot title satisfies the Constitution 19 only if it gives “notice which would lead to an inquiry into the body of the act” or indicate “the 20 scope and purpose of the law to an inquiring mind.” ATU, 142 Wn.2d at 217. Here, I-976 is 21 unconstitutional on both of these grounds. 22 23 24 1. The I-976 ballot title deceives voters. I-976 first violates the “subject in title” rule because it was presented to voters with a deceptive ballot title. Indeed, the Initiative’s sponsor shopped around for various ballot titles and 25 26 27 settled on this one. See supra, Section II.E. A strict rule applies when a ballot title is misleading and false. As the State acknowledged during preliminary injunction proceedings, “material PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 19 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 representations in the title must not be misleading or false.” Dkt. No. 42 at 18. A ballot title that 2 affirmatively misleads voters presents an a priori constitutional violation that invalidates the 3 entire measure. Howlett v. Cheetham, 17 Wash. 626, 635, 50 P. 522 (1897), superseded by 4 statute on other grounds as stated in Tacoma Land Co. v. Young, 18 Wash. 495, 52 P. 244 5 6 7 8 (1898) (“[A] title which is misleading and false is not constitutionally framed, and will vitiate the act.”). The State conceded this premise during preliminary injunction proceedings: THE COURT: Does the state agree that if the court were to conclude that the ballot title were materially misleading that that would vitiate the initiative? 9 10 11 12 ASG COPSEY: Yes, under . . . the cases that have been cited. Hackett Decl., Ex. 7 (RP (Nov. 26, 2019) at 98:25-99:2). I-976’s ballot title affirmatively deceives voters by misrepresenting that the $30 limit on 13 license fees does not apply to voter-approved charges. In fact, it expressly states that “voter- 14 approved charges” are outside the $30 limit: 15 Initiative Measure No. 976 concerns motor vehicle taxes and fees. 16 17 18 This measure would repeal, reduce, or remove authority to impose certain vehicle taxes and fees; limit annual motor-vehicle-license fees to $30, except voterapproved charges; and base vehicle taxes on Kelley Blue Book value. 19 Dkt. No. 24, Ex. B (emphasis added). This second sentence of the ballot title is the required 20 “concise description of the measure.” RCW 29A.72.050(1). By law, it must be “a true and 21 impartial description of the measure’s essential contents.” Id. (emphasis added). The concise 22 23 description performs the crucial function of telling voters “what the measure would do” if passed. Pierce Cty. v. State, 150 Wn.2d 422, 436, 78 P.3d 640 (2003) (“Pierce Cty. I”). 24 25 26 27 Here, the concise description makes two fatal factual misrepresentations that deceive voters on what I-976 “would do” upon adoption. First, it represents that “voter-approved charges” are exempt from the $30 cap. Second, it represents that I-976 limits “motor-vehiclePLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 20 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 license-fees” to $30 per year. These false claims, either alone or together, render I-976 2 unconstitutional under article II, section 19. 3 The ballot title is misleading because I-976 does not exempt “voter approved charges” from the $30 cap. 4 The ballot title affirmatively misled voters by claiming that I-976 exempted “voter- 5 6 7 8 approved charges” from the $30 cap. But the initiative provides no exemption for existing voter approved charges in excess of the $30 cap, nor does it make any provision for future public votes to exceed the $30 cap. Instead, I-976 eliminates all existing voter approved charges. And 9 10 11 through statutory repealers and other amendments, I-976 eliminates any possibility of a future vote of the people. The State does not dispute (nor could it) that no voter approved charges in excess of $30 12 13 survive I-976, nor does it challenge the fact that I-976 eliminates all mechanisms for future voter 14 approval. Thus, any voter who cast his or her vote based on the I-976 ballot title was 15 affirmatively misled into believing that prior voter approved charges would remain intact, and 16 that voters retained their authority to exceed the $30 cap for future local projects. In the face of 17 18 this affirmative misrepresentation, said voter would have no possible notice of the broad repeal 19 of local voter control and authority, nor any reason to look further than the express words of the 20 ballot title. Any voter reviewing I-976 would see only references to retaining voter approved 21 charges. It was the duty of the State under article II, section 19, to provide an accurate ballot title 22 without false and misleading representations, not the duty of voters to uncover the ballot title’s 23 24 false statements. The deceitful language of the ballot title is unconstitutional under article II, section 19. 17 25 26 27 17 The Initiative’s sponsor, Tim Eyman, freely acknowledged this deceit and the fatal problem with the I-976 ballot title. In an interview after the election, Eyman said the clear intent of his measure was to get rid of all car taxes and fees above $30, including voter-approved ones. He confirmed, for example, that it cancels Seattle’s $60 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 21 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 The State dances all around this self-created problem. Plaintiffs expect the State to claim that the ballot title may reference voter-approved charges as an exception to the $30 cap on “motor-vehicle-license-fees” because I-976 provides for that exception. But this statement is 4 even more misleading than the ballot title itself. The State cites only to section 2 of I-976, which 5 6 defines motor vehicle license fees to exclude “charges approved by voters after the effective date 7 of this section”—but I-976 nowhere exempts existing voter approved charges from its operative 8 provisions, nor provides a mechanism for future voter approval. To the contrary, other sections 9 of I-976 actively repeal existing options to vote. See Dkt. No. 24, Ex. A at § 6. Thus, the ballot 10 11 title remains false by informing voters that “[t]his measure would repeal, reduce, or remove authority to impose certain vehicle taxes and fees” in order to achieve its $30 cap, “except voter- 12 approved charges.” Dkt. No. 24, Ex. B (emphasis added). 13 14 The State may claim it had only 30 words for the ballot title, but that excuse rings hollow. 15 The fact that a title satisfies the statutory word length does not render it constitutional. Here, the 16 title is false and misleading precisely because it used too many words, or the wrong words, in 17 misleading the voters about I-976’s impact. Any voter reviewing I-976 would see only 18 19 references to voter approval that mask the repeals and amendments of statutes that previously authorized such votes. In this instance, it took fewer words, not more, to be accurate. 20 21 22 23 Finally, the State’s claim that the ballot title was accurate because “motor-vehicle-license fees” are “a specific type of fee collected only by the State” is wrong. The State completely ignores the specific definition of “state and local motor vehicle license fees” in I-976, and relies 24 25 26 27 voter-approved car tab that pays for increased bus service, that it also bars the city from asking voters to approve any car fees in the future, and also (attempts) to repeal Sound Transit’s authority to collect voter-approved vehicle taxes. Eyman’s excuse: “I didn’t write the ballot title,” he said. “The attorney general’s office did. The attorney general chose to describe it that way.” Dkt. No. 24, Ex. C. Even this statement is misleading, however, as the language of the ballot title is drawn from the precatory language of section 1 of the Initiative and was not challenged by him in the ballot title challenge he filed and withdrew. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 22 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 instead on other statutes that define vehicle license fees in a more restrictive and limited manner. 2 The purpose of the ballot title, however, is to provide a concise and true description of what I- 3 976 “would do,” not what other statutes provide. Indeed, I-976 broadly defines “state and local 4 motor vehicle license fees” to include “the general license tab fees paid annually for licensing 5 6 motor vehicles.” Dkt. No. 24, Ex. A at § 2(2). The definition refers to the “annual fee [that] 7 must be paid and collected annually and is due at the time of initial and renewal vehicle 8 registration.” Id. When interpreting this definition, I-976 specifically directs that the provisions 9 of the measure “are to be liberally construed to effectuate the intent, policies, and purposes of 10 11 this act.” Id. at § 14. The intent, policies, and purposes are apparent from its name: “Bring Back Our $30 Car Tabs.” Id. at § 17. It is designed to correct “politicians” who “keep ignoring the 12 voters’ repeated, unambiguous mandate by imposing higher and higher vehicle taxes and fees.” 13 14 Id. at § 1. By attempting to use narrower definitions of vehicle license fees to avoid the actual I- 15 976 definition of “state and local motor vehicle license fees,” the State presents an untenable and 16 incorrect reading of the Initiative itself. 17 18 19 Based on its inapplicable definitions, the State further argues that the voter approval exception applies to state license fees only, not local charges like TBD VLFs. The I-976 definition, however, explicitly applies to both “[s]tate and local motor vehicle license fees.” 20 21 22 Dkt. No. 24, Ex. A at § 2(2) (emphasis added). Whether license fees go to the TBD or the State does not matter because both fall within the I-976 definition. All fees apply upon “initial and 23 renewal vehicle registration” and are assessed and collected by the Department of Licensing for 24 the privilege of operating a vehicle. Because the I-976 definition of “motor vehicle license fees” 25 controls and encompasses all the various state and local fees paid annually for licensing motor 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 23 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 vehicles, the State’s claim that the ballot title applies only to the state portion of the license fee is 2 neither cogent, nor correct. 3 4 5 6 7 8 Even without an exemption for voter-approved charges, the claim of a $30 cap is false and misleading. The ballot title plainly describes a $30 cap on vehicle license fees (except for voter approved charges), but this claim is also false and misleading. As noted above, the Initiative’s broad and liberally construed definition of “state and local motor vehicle license fees” includes all manner of fees that are “paid and collected annually” and “due at the time of initial and 9 10 11 renewal vehicle registration.” Dkt. No. 24, Ex. A at § 2(2). The myriad of fees covered by this broad definition includes a large number of vehicle license fees under chapter 46.17 RCW, 12 which are detailed below in Plaintiffs’ discussion of how the initiative violates article II, section 13 37. See infra, Section V.D. These fees put the State in an unsolvable quandary given the ballot 14 title’s blatant misrepresentation of a $30 cap. During preliminary injunction proceedings, the 15 State sought to avoid invalidation of I-976 under article II, section 37 by claiming that there were 16 no implied amendments to chapter 46.17 RCW annual license fees and that those fees will 17 18 continue to apply in excess of the $30 cap. Dkt. No. 42 at 22, 24-25; Hackett Decl., Ex. 7 (RP 19 (Nov. 26, 2019) at 80:7-82:18). But the State’s argument under article II, section 37, results in 20 annual state and local motor vehicle license fees well in excess of $30, and proves that the ballot 21 title is unconstitutionally deceptive under article II, section 19. The State has placed itself in a 22 box where either exit violates the Constitution and invalidates I-976. 23 To avoid the necessary implications of its positions, the State argues that sections 3 and 4 24 of I-976 re-enact statutes where pre-existing language preserves “any other fee or tax required by 25 26 27 law.” But this argument merely begs the question of what other fees or taxes are “required by law.” Rather than providing a third door out of the State’s unconstitutional box, the begged PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 24 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 question is easily answered by the broad definitional scope of “state and local motor vehicle 2 license fees” under section 2 of I-976. Any state or local motor vehicle license fee that exceeds 3 $30 (unless voter approved!) is now unlawful with the initiative’s adoption. In short, there is no 4 serious debate that the various chapter 46.17 licensing fees fall within the broad scope of fees 5 6 7 8 9 10 11 12 covered by the I-976 definition. The ballot title fails to include necessary subjects. Even if the I-976 ballot title were not false and misleading, it still fails the additional subject in title requirements of article II, section 19. There is no reference whatsoever in the I976 ballot title to the retirement of bonds (which requires substantial collection of taxes and expenditures) or a specific tax on vehicle sales or the other subjects that pollute the Initiative, including substantial changes to the electric vehicle road mitigation fund, or the snowmobile 13 14 fund. Rather, the I-976 ballot title gives notice only that the Initiative would limit license fees to 15 $30, repeal certain vehicle taxes and fees, and base vehicle taxes on Kelley Blue Book value. 16 Because the title does not mention key subjects covered by the Initiative, nor does it prompt 17 inquiry into these topics by including words like “bond” or “vehicle sales,” the ballot title 18 violates the subject in title requirement of article II, section 19 for this additional reason. See 19 ATU, 142 Wn.2d at 220-29 (subject in title rule violated even where title referenced the word 20 “tax” because that term did not carry its ordinary meaning); see also State ex rel. Wash. Toll 21 22 23 Bridge Auth. v. Yelle, 32 Wn.2d 13, 27-28, 200 P.2d 467 (1948) (term “ferry connections” in title of the act was “not sufficient to put a reasonably intelligent person on notice” that the act 24 25 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 25 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 empowered the state toll bridge authority to “acquire and operate a general water transportation 2 system”). 3 4 I-976 Runs Afoul of the Single Subject Rule Because It Combines Multiple Unrelated Subjects, Which are Not Germane to Each Other. 5 In addition to the subject in title requirement, I-976 violates article II, section 19’s single 6 7 8 subject requirement. Article II, section 19 provides that “[n]o bill shall embrace more than one subject.” This requirement “prevent[s] hodge-podge or log-rolling legislation” in which multiple unrelated subjects are attached to each other in a single piece of legislation. Yelle, 32 Wn.2d at 9 10 11 24. “The . . . logrolling of unrelated measures . . . violates the fundamental principle embedded in article II, section 19” because it necessarily requires “voters who supported one subject of the 12 initiative to vote for an unrelated subject they might or might not have supported.” City of 13 Burien, 144 Wn.2d at 827-28. Because “it is impossible for the court to assess whether either 14 subject would have received majority support if voted on separately” where an initiative violates 15 the single subject rule, the courts “must declare the entire initiative void.” Id. at 825, 828. 16 In evaluating a potential single subject violation, courts first consider whether an 17 18 initiative’s ballot title is “general or restrictive.” Id. at 825. “A restrictive title is one where a 19 particular part or branch of a subject is carved out and selected as the subject of the legislation.” 20 State v. Broadaway, 133 Wn.2d 118, 127, 942 P.2d 363 (1997) (internal quotations omitted). I- 21 976 is restrictive because it is limited to a particular type of charge (“motor vehicle taxes and 22 fees”), a cap on a specific type of fee, and a particular index of value (“Kelley Blue Book”). See 23 id. at 127-28 (title was restrictive where it “carve[d] out an area of criminal offenses, armed 24 crime, and limit[ed] its scope to increasing penalties for armed crime” (emphasis in original)); 25 26 27 Yelle, 32 Wn.2d at 27 (title referred to the specific subject of toll bridges, rather than the general subject of a transportation system, and thus title was restrictive). Because the body of the PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 26 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 initiative contains a range of subjects that are not “fairly within” the scope of this restrictive title, 2 it violates article II, section 19 on this ground alone. See ATU, 142 Wn.2d at 210-11 (listing 3 cases). 4 Even assuming for the sake of this Motion that the title of I-976 is general, the Initiative 5 6 still violates article II, section 19 because it lacks “rational unity.” With respect to initiatives 7 with a general title, courts “look to the body of the initiative to determine whether a rational 8 unity among the matters addressed in the initiative exists.” City of Burien, 144 Wn.2d at 826. 9 “[R]ational unity must exist among all matters included within the measure and the general topic 10 expressed in the title.” Id. Consequently, “the existence of rational unity or not is determined by 11 whether the matters within the body of the initiative are germane to the general title and whether 12 they are germane to one another.” Id. (emphasis added). 13 As an initial matter, the State’s attempted characterization of the title as relating to motor 14 15 vehicle taxes and fees is overbroad. In reviewing a similar challenge to I-776 (a similar Eyman 16 $30 car tab initiative), the Washington Supreme Court adopted the trial court’s conclusion that 17 the subject of that initiative was “limiting . . . charges that motor vehicle owners must pay upon 18 19 the registration or renewed registration of a vehicle” even though the broadly worded statement of subject stated that it “concern[ed] state and local government charges on motor vehicles.” 20 21 22 Pierce Cty. I, 150 Wn.2d at 427, 432, 436 (internal quotations omitted; emphasis added) 18; see also ATU, 142 Wn.2d at 209 (title of initiative need not “contain a general statement of the 23 subject of an act”). Consistent with the Court’s analysis of I-776 in Pierce Cty. I, I-976’s general 24 subject should be qualified as “limiting” vehicle taxes and fees. 25 26 27 18 See also Dkt. No. 54, Ex. A (text of I-776). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 27 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 With that premise in mind, ATU, Kiga and Lee are instructive as to the characteristics of 2 initiatives with general titles that violate the single subject requirement of Article II, Section 19. 3 ATU addressed the constitutionality of I-695, Eyman’s initial $30 tab initiative. The Court held 4 that the initiative had a general ballot title related to limiting taxation. The two subjects of the 5 6 initiative—“to specifically set license tab fees at $30 and to provide a continuing method of 7 approving all future tax increases”—both related to the general title of limiting taxation. ATU, 8 142 Wn.2d at 217. But the Court struck down the initiative as violating the single subject 9 requirement because there was no rational unity between those two subjects. Id. 10 11 In City of Burien, the Supreme Court found that I-722 had two subjects related to the “general topic of tax relief.” 144 Wn.2d at 827. But the Court went on to hold the two subjects 12 “are not germane to one another. The nullification and onetime refund of various . . . tax 13 14 15 16 17 18 19 increases and monetary charges is unnecessary and entirely unrelated to permanent, systemic changes in property tax assessments.” Id. In Lee, the Court assumed that the two subjects of the initiative at issue fell within a general title related to “taxes” or “fiscal restraint.” 185 Wn.2d at 622. But applying ATU and City of Burien, the Court concluded that the two subjects, a one-time sales tax reduction and a permanent change in the way tax increases are approved, were not “germane” to each other and 20 21 22 therefore the initiative violated the single subject requirement. Id. at 623. These cases show that it is not enough that all subjects within an initiative relate to the 23 general subject of the ballot title. Thus, assuming the general subject of the I-976 ballot title is 24 limiting motor vehicle taxes and fees (or even accepting the State’s overbroad characterization of 25 the subject), the fact that the divergent provisions of I-976 arguably touch on that subject does 26 not end the single subject inquiry. Instead, this Court must do what the Supreme Court did in 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 28 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 ATU, City of Burien, and Lee: take a hard look at whether the multiple subjects of I-976 are 2 germane to one another. As demonstrated below, they are not. 3 ATU, City of Burien, and Lee also demonstrate that an initiative containing one subject 4 that is “long-term” and “continuing” in nature, and a second subject that is a “onetime event” 5 6 more “narrow in scope” is void under the single subject rule. City of Burien, 144 Wn.2d at 826. 7 In those cases, the initiative combined a general, continuing subject such as a change in how 8 taxes are assessed or how tax increases are enacted with a narrow specific subject such as a one- 9 time tax reduction. In such a case, the subjects are not considered germane to each other. City of 10 11 Burien, 142 Wn.2d at 826; Lee, 185 Wn.2d at 622-23; ATU, 142 Wn.2d at 216-17. Washington Toll Bridge Authority v. State, 49 Wn.2d 520, 523-25, 304 P.2d 676 (1956), also comes to the 12 same result. In Washington Toll Bridge Authority, the legislation had two subjects. 49 Wn.2d at 13 14 524. One was a provision that generally authorized a state agency to operate all toll roads and 15 the second was a provision funded the construction of a specific toll road. Id. Even though both 16 subjects related to the general subject of toll roads, the Court struck down the initiative because 17 the two subjects—one continuing and one not continuing in character—were not “germane” to 18 each other. Id. 19 Here, I-976 has multiple subjects that all must be found to be germane to each other to 20 21 22 survive scrutiny under Article II Section 19. Specifically, I-976 combines seven subjects: (1) a purported 19 reduction in state vehicle registration fees to $30, (2) elimination of locally voted 23 registration taxes, (3) elimination of the one-time vehicle sales tax, (4) the removal of local voter 24 authority to adopt vehicle fees, (5) a purported requirement that Sound Transit repay outstanding 25 26 19 27 While I-976 states it is lowering the state MVET to $30, that apparently is not true, another deception to the voter. See supra, Section V.B.1. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 29 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 bonds, (6) a change in a vehicle valuation schedule only used by Sound Transit, and (7) a 2 reduction in Sound Transit’s authority to issue future MVETs should it not repay its bonds. As 3 explained below, several of these subjects are not germane to each other, violating Article II, 4 Section 19. 5 The most obvious non-germane subject of I-976 is Section 12: the early retirement of 6 7 Sound Transit’s outstanding bonds and debt. That section provides that a regional transit 8 “authority that imposes a motor vehicle excise tax under RCW 81.104.160 must fully retire, 9 defease, or refinance any outstanding bonds issued under this chapter” if the bonds are secured 10 11 by revenue from an MVET. Dkt. No. 24, Ex. A at § 12. As the State admits, this provision targets Sound Transit. 20 The purported attempt to force early retirement of Sound Transit’s 12 bonds is a onetime event concerning a specific local subject. In contrast, the other provisions are 13 14 general continuing subjects that are a matter of statewide application. For example, the State 15 MVET is set (allegedly) at $30 for every vehicle owner in the State, all authority for localities to 16 impose local MVETs is removed, and the statewide sales tax on vehicle sales is eliminated. The 17 intent of these subjects is a permanent statewide change in the MVET, which is not germane to 18 19 the effort to effect a one-time change in a local MVET. ATU, City of Burien, Lee, and Wash. Toll Bridge Auth. therefore compel the conclusion that I-976 violates the single-subject 20 21 requirement. Moreover, the purported requirement for Sound Transit to retire, defease, or refinance its 22 23 bonds and debt secured by its MVET is fundamentally different in kind from other provisions of 24 25 26 27 20 See Hackett Decl., Ex. 7 (RP (Nov. 26, 2019) at 65:17-66:15, 68:2-11); Dkt. No. 42 at 16. As discussed supra, Section II.D.3, V.B.2, nothing in the ballot title mentions Sound Transit or the purported requirement for Sound Transit to raise and spend hundreds of millions of dollars repaying bonds and delaying projects (Butler Decl., ¶¶ 17, 23-27) or the contingent alteration of the MVET rate that future Sound Transit projects require (Dkt. No. 24, Ex. A at § 13). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 30 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 I-976, such as the requirement that the State MVET be reduced to allegedly $30. I-976 purports 2 to require Sound Transit, if possible, to use revenue already dedicated to completing its voter- 3 approved projects to retire, defease, or refinance its bonds and debt. Because retirement only 4 occurs at maturity, Sound Transit does not have the option to retire all of its bonds in the 5 6 immediate future. Butler Decl., ¶ 19. To defease or refinance its outstanding debt, Sound 7 Transit would be required to collect additional taxes and expend a significant portion of taxpayer 8 funds currently committed to constructing, operating, and maintaining the regional transit 9 system. Id., ¶ 17. The direct additional cost to Sound Transit would be $521 million, which 10 11 consists of additional principal and increased interest costs associated with borrowing the amount of replacement debt necessary to redeem on the existing debt. Id., ¶ 24. 12 Whether to require Sound Transit to collect additional taxes and defer projects to raise 13 14 over $500 million and to reallocate and expend already committed taxpayer funds is a 15 fundamentally different legislative policy choice than whether simply to reduce the State MVET 16 going forward. See, e.g., City of Burien, 144 Wn.2d at 829 (Sanders, J., concurring) (provision 17 of initiative that “reallocates taxes” is “a wholly different subject from those 18 19 provisions . . . which truly do limit taxation”). Thus, in addition to combining specific, one-time requirements for a single entity with continuing, systemic policy changes that apply statewide, 20 21 22 23 24 25 26 section 12 imposes requirements for tax collection, reallocation of revenue, and spending that stand in sharp contrast to the other requirements of I-976. Accordingly, section 12 is a fundamentally different subject not germane to the other subjects of I-976. The State’s principal response to this unconstitutional lack of germaneness is to assert that each of the multiple subjects is “necessary to implement” the others. But if legislation cobbling together such starkly opposing policy proposals could survive scrutiny on the basis that 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 31 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 one proposal was purportedly “necessary” to implement the other, the exception would swallow 2 the rule, rendering the single-subject requirement a meaningless safeguard against logrolling. 3 Indeed, to Plaintiffs’ knowledge, a court has never upheld legislation on the basis of alleged 4 necessity where, as here, the legislation combined specific, one-time requirements with general, 5 6 7 continuing requirements. That section 12 is a separate subject not germane to the $30 license fees cap contained in 8 section 2 is further confirmed by Pierce Cty. I. There, plaintiffs challenged Eyman’s I-776 under 9 the single subject rule because I-776 both placed a $30 limit on license fees and addressed 10 11 retirement of Sound Transit bonds to which license fees were pledged. 150 Wn.2d at 427-29. Tellingly, no justice opined there was rational unity between the other provisions of I-776 and 12 the one related to the early retirement of Sound Transit’s bonds. Id. at 431-36 (majority), 442-44 13 14 (dissent). In fact, the State in Pierce Cty. I did not even argue rational unity existed in the event 15 the Sound Transit bond provision was legally operative. Rather, the only argument the State 16 made was that the language was precatory and lacked legal effect. Brief of Appellant State of 17 Washington, Pierce Cty. I, No. 73607-3, 2003 WL 24118263, at *12-20 (2003); Reply Brief of 18 19 State of Washington, Pierce Cty. I, No. 73607-3, 2003 WL 24118267, at *3-4 (2003). The Court accepted that argument holding the Sound Transit bond provision was not a second subject 20 21 22 because it was merely “precatory” language. Id. at 431-33. The dissent—which the Court in the present case acknowledged is “persuasive”—opined there was no rational unity between the $30 23 cap on license fees and the Sound Transit bond provision and would have invalidated I-776 24 notwithstanding the precatory language. Id. at 442-44 (Chambers, J., dissenting); see also 25 Hackett Decl., Ex. 7 (RP (Nov. 26, 2019) at 64:22-23). 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 32 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 4 5 6 7 The precatory language in I-776 stands in stark contrast to the mandatory language of I976. I-776 provided in relevant part: If the repeal of taxes in section 6 of this act affects any bonds previously issued for any purpose relating to light rail, the people expect transit agencies to retire these bonds . . . . Taxing districts should abstain from further bond sales for any purpose relating to light rail . . . . The people encourage transit agencies to put another tax revenue measure before voters . . . . Id. at 448 (emphasis added). The language in I-976, however, provides that Sound Transit “must 8 fully retire, defease, or refinance any outstanding bonds issued under this chapter” if the bonds 9 are secured by revenue from an MVET. Dkt. No. 24, Ex. A at § 12 (emphasis added). The 10 11 12 average informed voter would consider the use of “must” regarding retiring bonds in I-976 to be legally operative. See ATU, 142 Wn.2d at 205. The State and the Initiative’s sponsor both argue that section 12 is mandatory. See Dkt. No. 42 at 16; Dkt. No. 87, ¶ 76. Thus, Pierce Cty. I 13 14 supports that section 12 is a separate subject not germane to the other provisions of I-976. 15 Indeed, the fact that the applicability of section 12 is further based on a series of contingencies 16 “warrants the protections of article II, section 19 even more than bills flawed by traditional 17 logrolling because many voters will not even receive the benefit of at least having the provision 18 they did vote for go into effect.” Lee, 185 Wn.2d at 627. 19 Beyond section 12, there are other sections of I-976 that are not germane to each other. 20 The elimination of the motor vehicle sales tax, section 7, is a particularly stark example of the 21 22 lack of rational unity between the varied provisions of I-976. A sales tax is a fundamentally 23 different beast from the licensing fees and taxes addressed in other provisions of I-976, as the 24 former is a one-time tax that arises only at the time of sale and affects only a subset of vehicle 25 owners within a given period of time, whereas the latter is a recurring and universally applicable 26 charge imposed at the time of vehicle licensing. Section 7 is not germane to the other provisions 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 33 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 of I-976. The single subject analysis requires that each subject be germane to each other and not 2 just to the general ballot title. “[R]ational unity must exist among all matters included within 3 the measure . . . .” City of Burien, 144 Wn.2d at 826 (emphasis added). 4 As another example, section 8 of I-976 sets Kelley Blue Book as the basis for valuing 5 6 vehicles for an MVET based on valuation. But the only MVET in the state based on valuation is 7 the Sound Transit MVET. See RCW 81.104.160. Thus section 8 of I-976 is not germane to the 8 provisions relating to the State MVET, local TBD MVETs or the vehicle sales tax. See Lee, 185 9 Wn.2d at 622 (“[A] reduction to the sales tax rate is unrelated to both a constitutional 10 11 amendment, which would impact future legislatures, and to the way that future taxes and fees are approved.” (emphasis in original)). 12 Nor do the cases rejecting single subject challenges apply. For example, Wash. Ass’n for 13 14 Substance Abuse & Violence Prevention v. State, 174 Wn.2d 642, 659, 278 P.3d 632 (2012) is 15 readily distinguishable because the Court’s holding rested on the Legislature’s longstanding 16 historical practice of addressing wine and spirit regulation in the same legislation. There is no 17 such history here. The State MVET, the local TBD MVET, and the Sound Transit MVET were 18 19 all enacted separately over decades. Citizens for Responsible Wildlife Mgmt. v. State, cited by the State in earlier briefing, is also inapposite, because the provisions at issue there—“trapping 20 21 22 23 24 25 26 [mammals] with body-gripping traps and killing [them] with two particular pesticides”—were much more akin to one another than the varied and wide-ranging provisions of I-976. 149 Wn.2d 622, 639, 71 P.3 644 (2003). In summary, I-976 cobbles together multiple unrelated subjects in order to garner support. A voter may have supported I-976 due to a distaste for the state MVET, or a locally voted MVET, or the MVET valuation schedule, or Sound Transit. Combining these subjects 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 34 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 constitutes impermissible logrolling and warrants invalidation of I-976 in its entirety. See City of 2 Burien, 144 Wn.2d at 827-28; ATU, 142 Wn.2d at 207, 216. 3 4 I-976 Violates Article II, Section 37. I-976 also violates article II, section 37 of the Washington Constitution because it amends 5 existing statutes without setting the amendments forth in full, resulting in confusion as to the 6 7 effect of the new law. Article II, section 37 mandates that “[n]o act shall ever be revised or 8 amended by mere reference to its title, but the act revised or the section amended shall be set 9 forth at full length.” The purpose of this requirement is to “avoid confusion, ambiguity, and 10 11 12 uncertainty” by disclosing the “effect of the new legislation” and its “impact on existing laws.” ATU, 142 Wn.2d at 245-46 (internal quotations omitted). Article II, section 37 “applies to initiatives.” Id. at 247. 13 14 Washington courts employ a two-pronged test to determine if a law violates article II, 15 section 37. First, a court decides whether the new law is a complete act—one in which “the 16 scope of the rights or duties created or affected by the legislat[ive] action can be determined 17 without referring to any other statute or enactment[.]” ATU, 142 Wn.2d at 246; see also El 18 Centro De La Raza v. State, 192 Wn.2d 103, 129, 428 P.3d 1143 (2018). Second, the court 19 addresses whether “a straightforward determination of the scope of rights or duties under the 20 existing statutes [would] be rendered erroneous by the new enactment[.]” ATU, 142 Wn.2d at 21 22 246 (internal quotations omitted). “This prong of the test ensures that the legislature is [or here, 23 the people, are] aware of the legislation’s impact on existing laws.” El Centro, 192 Wn.2d at 24 129. As discussed below, I-976 fails both prongs of the above test and should be invalidated in 25 its entirety. 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 35 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 4 I-976 is not a complete act. The State has not argued that I-976 is a complete act, nor could it. I-976 spans a range of subjects and primarily revises existing statutes. See supra, Section II.D. Its impact cannot be determined without referring to those other statutes. Accordingly, I-976 is not the type of stand- 5 alone act that Washington courts have deemed “complete” for article II, section 37 purposes; to 6 7 8 9 10 11 the contrary, it is akin to the provisions deemed “not complete” in ATU, 142 Wn.2d at 253-54, and State ex rel. Living Servs., Inc. v. Thompson, 95 Wn.2d 753, 757-58, 630 P.2d 925 (1981). I-976 effectively amends other statutes without disclosure and renders erroneous a straightforward determination of rights and duties thereunder. I-976 fails to disclose significant changes to existing TBD authorizing legislation and to 12 chapter 46.17 RCW’s vehicle license fee scheme and contains conflicting provisions as to the 13 people’s authority to enact voter-approved charges, thus rendering a straightforward 14 interpretation of existing law erroneous. Accordingly, I-976 fails the second prong of the article 15 II, section 37 test and should be invalidated. 16 I-976 renders unclear TBDs’ vehicle fee authority. 17 First, section 6 of I-976 amends TBDs’ authorizing legislation without setting forth those 18 19 laws’ provisions. Chapter 36.73 RCW grants TBDs certain powers, including the power to 20 impose a vehicle fee. See RCW 36.73.040(3)(b); .065. As noted supra, Section II.A, RCW 21 82.80.140 also authorizes a TBD, “[s]ubject to the provisions of RCW 36.73.065,” to impose a 22 vehicle fee up to $100 per vehicle registered in the district. 23 24 A person reviewing chapter 36.73 RCW would reasonably conclude that TBDs have authority to impose a vehicle license fee. But Section 6 of I-976 completely repeals RCW 25 82.80.140, which also grants TBDs the authority to impose a vehicle fee. As the State conceded 26 27 in preliminary injunction briefing, the vehicle fee provisions in RCW 36.73.040 and RCW PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 36 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 36.73.065 “would no longer apply.” 21 These statutes are not set out in full, and I-976’s effect on 2 them is not disclosed. Accordingly, I-976 renders erroneous a straightforward determination of 3 rights and duties under RCW 36.73.065 and RCW 36.73.040. 4 The Supreme Court has not hesitated to invalidate similar provisions of incomplete acts 5 6 that fail to disclose their effect on existing statutes. In ATU, the Supreme Court held that section 7 2 of I-695 (imposing a voter approval requirement for tax increases) “clearly” impacted existing 8 statutes “since it encompasse[d] voter approval for all taxes,” but that the “impact [wa]s not at all 9 clear” because I-695 did not set forth in full specific voter approval requirements impacted by I- 10 695’s more general voter approval provision. 142 Wn.2d at 253-54. Thus, because I-695 did not 11 “disclose its effect” on, let alone mention existing statutes, the Court invalidated the offending 12 section. Id. at 253-54, 256; see also El Centro, 192 Wn.2d at 132 (a new act greatly restricting 13 14 the existing bargaining rights of public school employees violated article II, section 37 because it 15 did not “explicitly show how [the new act] relates to statutes it amends” (internal quotations 16 omitted)); Thompson, 95 Wn.2d at 757-58. Here, like the laws at issue in ATU, El Centro, and 17 Thompson, I-976’s impact on TBDs’ ability to impose vehicle fees is not clear because I-976 18 fails even to mention RCW 36.73.065 or RCW 36.73.040. See ATU, 142 Wn.2d at 253-54. 19 In sum, I-976 impermissibly impacts TBD authorizing legislation without setting forth 20 21 the existing laws. For this reason alone, I-976 violates article II, section 37. I-976’s effect on chapter 46.17 RCW is not disclosed. 22 I-976 also fails to disclose its effect on many provisions of chapter 46.17 RCW, the 23 24 general statutory scheme governing “vehicle fees.” This chapter is divided into several 25 categories of vehicle fees, including “vehicle license fees” (RCW 46.17.305-.380), “filing and 26 27 21 Dkt. No. 42 at 22. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 37 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 service fees” (RCW 46.17.005-.060), and “license plate fees” (RCW 46.17.200-.250). Many of 2 these vehicle fees are charged and collected at the time of annual vehicle registration renewal as 3 part of the car tab renewal fee. 4 The baseline fee is the vehicle license fee set forth in RCW 46.17.350 (license fees by 5 6 vehicle type) or .355 (license fees by weight). Other vehicle license fees are then added to that 7 baseline. See, e.g., RCW 46.17.365 (motor vehicle weight fee); RCW 46.17.324 (transportation 8 electrification fee); and RCW 46.17.375-.380 (recreational vehicle disposal fees). And several 9 charges in the filing and service fees and license plate fees categories are also charged as 10 11 applicable. See, e.g., RCW 46.17.005 ($4.50 filing fee); RCW 46.17.040 ($8.00 service fee); RCW 46.17.015, .025, .210, .220 (various license plate fees and/or license service fees). Finally, 12 any authorized local taxes and fees (such as TBD fees or MVETs) are added to and comprise 13 14 part of the final car tab fee. 15 Section 2 of I-976 adds a new section to chapter 46.17 RCW mandating that “[s]tate and 16 local motor vehicle license fees may not exceed $30 per year for motor vehicles . . . .” Dkt. No. 17 24, Ex. A at § 2(1). I-976 defines “state and local motor vehicle license fees” as the “general 18 19 license tab fees paid annually for licensing motor vehicles” except for “charges approved by voters after the effective date of this section.” Id. at § 2(2) (emphasis added). That definition 20 21 22 broadly encompasses both the vehicle license fees set forth in RCW 46.17.350 and .355 and the numerous other charges discussed above that are collected at the time of annual registration 23 renewal. With the exception of the motor vehicle weight fee (RCW 46.17.365, which is repealed 24 in section 6 of I-976) and the filing fee (RCW 46.17.005, which is purportedly retained in 25 sections 3(2) and 4(4) of I-976), none of those additional fees are referenced in I-976. 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 38 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 Because I-976 provides that annual license tab fees “may not exceed $30 per year,” the Initiative must amend the statutes imposing any other fees imposed as part of the car tab fee. In other words, to effectuate the $30 cap, I-976 effectively eliminates the additional vehicle license 4 fees, filing fees, and license plate fees that are also charged and collected as part of the total 5 6 7 8 annual license tab fee. But I-976 does not disclose this effect and, thus, the Initiative again violates article II, section 37. To avoid invalidation under article II, section 37, the State has claimed that the annual 9 license fees in chapter 46.17 RCW will continue to apply in excess of the $30 cap. See Dkt. No. 10 42 at 24-25; see also Hackett Decl., Ex. 7 (RP (Nov. 26, 2019) at 81:15-82:18). Specifically, the 11 State relies on language in RCW 46.17.350(2) providing that the “vehicle license fee required in 12 subsection (1) of this section is in addition to the filing fee required under RCW 46.17.005, 13 14 and any other fee or tax required by law.” (Emphasis added). This argument proves 15 Plaintiffs’ point. Either way, I-976 violates the Constitution. If I-976 is narrowly construed 16 (contrary to its terms) to allow annual license fees well in excess of $30, then it violates subject 17 in title requirements through yet another misrepresentation. If I-976 amends these other statutes 18 19 by implication, then the initiative is unconstitutional under article II, section 37. Because the State’s inconsistent positions cannot be reconciled, I-976 should be invalidated. 20 21 22 Here, in order that annual license fees not exceed $30, additional fees charged at the time of renewal must be eliminated. If they are not eliminated, I-976 is materially misleading in 23 stating that car tab fees shall not exceed $30. Accordingly, article II, section 37 requires 24 invalidation of I-976. 25 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 39 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 I-976 creates confusion as to voter authority to enact fees in excess of $30. 2 Finally, I-976 violates article II, section 37, as it is unclear whether voters still have 3 4 authority to enact vehicle fees in excess of the $30 cap. See supra, Section V.B. In the same way that section 2 of I-695 created confusion about how voters could approve taxes and fees and 5 thus violated article II, section 37, see ATU, 142 Wn.2d at 253-54, 257, sections 1-2, 6, and 106 7 11 of I-976 create confusion by purporting to allow voter enacted vehicle fees, while at the same 8 time eliminating the authority for local voters to impose such fees. This is the precise kind of 9 confusion article II, section 37 is designed to prevent. See Wash. Citizens Action of Wash. v. 10 State, 162 Wn.2d 142, 161-62, 171 P.3d 486 (2007); ATU, 142 Wn.2d at 245. 11 12 Article 11, Section 12 of the Constitution Vests Legislatively Delegated Taxing Authority for Local Purposes in Local Municipal Governments. 13 The Washington Constitution enshrines the value of local control over issues of primarily 14 local concern. As the Supreme Court recently noted, the constitutional “home rule” 22 provisions 15 16 regarding taxation establish the “presumption of autonomy in local governance.” Watson v. City of Seattle, 189 Wn.2d 149, 166, 401 P.3d 1 (2017). The Court held: “The ‘home rule’ principle 17 18 19 seeks to increase government accountability by limiting state-level interference in local affairs. . . . This is particularly important with respect to local taxation authority.” Id. at 166-67. As a 20 result, our state follows the “‘deep-seated Anglo-American principle of keeping taxation as close 21 to the tax-burdened electorate as possible.’” Id. at 167 (quoting Matthew Senechal, Revisiting 22 Granite Falls: Why the Seattle Monorail Project Requires Re-examination of Washington’s 23 Prohibition on Taxation without Representation, 29 SEATTLE U. L. REV. 63, 73 (2005)). 24 25 26 22 27 At the time of the Constitution’s framing, “home rule” referred generally to local control, not to the laterdeveloped concept of a home rule charter government. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 40 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 I-976 rides roughshod over the Constitution’s home rule protection of local taxing authority. Rather than respecting the decisions of local voters and their elected representatives on how to best fund local projects like transit, I-976 revokes local authority through an initiative 4 vote. But voters across the state have no business dictating the local affairs of Asotin County, 5 6 Moses Lake, or Puget Sound residents. Because I-976 violates various provisions of the 7 constitution that limit state legislative authority over local taxation, the initiative is 8 unconstitutional on this additional ground. 9 10 11 Two provisions of the constitution allocate the power of local taxation for local purposes between state and local governments—with the bulk of responsibility to decide whether to impose taxes vested in local government. Larson v. Seattle Popular Monorail Auth., 156 Wn.2d 12 752, 756-57, 131 P.3d 892 (2006). Under the heading “Assessment and Collection of Taxes in 13 14 15 16 17 18 19 Municipalities,” article 11, section 12 bars the Legislature from imposing local taxes for local purposes, but allows it to “vest” such power in local governments: 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. (Emphasis added). Similarly, article VIII, section 9, titled “Special Assessments or Taxation for 20 21 22 23 24 25 Local Improvements,” allows taxing authority to be vested in local governments: 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. (Emphasis added). 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 41 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 Although much ink has been spilled addressing the first provision of section 12 (whether the Legislature has imposed a tax on a municipality for local purposes), very little attention has been given to the final clause in section 12: what it means for the Legislature to “vest” in the 4 municipality “the power to assess and collect taxes” for local purposes. The current case 5 6 squarely presents this important issue: Where the Legislature has previously vested authority in 7 local municipalities to impose special taxes for local purposes and the municipality has opted to 8 exercise that authority, does the final clause of section 12 preclude subsequent legislative 9 enactments that would further condition, modify or eliminate the municipalities’ vested local 10 taxing authority? The answer must be “yes” to the extent the local municipality has opted to 11 impose the tax to achieve a local purpose. 12 Known as the “home-rule provision,” section 12 restricts “direct legislative action as to 13 14 local taxing matters” with the objective to “bar the state legislators, whose members come from 15 all parts of the state, from dictating local taxing policy and instead to allow municipalities to 16 control local taxation for local purposes.” Larson, 156 Wn.2d at 756 n.3. Section 12 is a 17 limitation on legislative power. See Moses Lake Sch. Dist. No. 161 v. Big Bend Cmty. Coll., 81 18 19 Wn.2d 551, 555, 503 P.2d 86 (1972) (“the state constitution is a limitation upon the power of the legislature rather than a grant thereof”). Limitation of the Legislature’s power with respect to 20 21 22 23 taxes for local purposes serves to guaranty local governments “the right to carry on their strictly domestic or municipal business in their own way, without interference from the State.” State v. Burr, 65 Wash. 524, 527, 118 P. 639 (1911). 24 25 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 42 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks In State v. Redd, 166 Wash. 132, 137, 6 P.2d 619 (1932), 23 the Supreme Court explained 1 2 3 how the structure of section 12 restricts a fresh exercise of legislative power over a previous vesting of municipal taxing authority for a local purpose. According to Redd, the first provision 4 of section 12 “divests” the Legislature of the power to impose any local taxes for local 5 6 purposes. 166 Wash. at 137-39. Having wholly deprived the Legislature of any power over 7 local taxes for local purposes, section 12 then “invests” the Legislature “with a portion of the 8 power of which it had been divested” so that it could then delegate to local governments the 9 authority to impose and collect local taxes for local purposes. Id. at 138 (emphasis added). 10 11 Using this limited grant of a delegation power, the final clause of section 12 permits the Legislature to “vest” local governments with the power to impose and collect local taxes for 12 local purposes. Id. at 138-39. See also State v. Carson, 6 Wash. 250, 257, 33 P. 428 (1893) 13 14 15 (“The power denied to the legislature is the power it is permitted to vest in [municipal] corporate authorities.”). Under section 12, the Legislature can condition its initial delegation of local taxing power 16 17 18 19 to municipalities by specifying rates, duration, etc. See, e.g., State ex rel. Sch. Dist. 37 of Clark Cty. v. Clark Cty., 177 Wash. 314, 322, 31 P.2d 897 (1934) (“Section 9, art. 7, and section 12, art. 11, of the state Constitution, providing that the power to assess and collect taxes may be 20 21 22 vested in the corporate authorities of all municipal corporations, do not grant such power, but leaves it to be granted by the Legislature, attended by such conditions and limitations as that 23 body may prescribe.” (internal quotations omitted)); Owings v. City of Olympia, 88 Wash. 289, 24 294, 152 P. 1019 (1915) (when vesting a local tax, the legislature may condition its exercise). In 25 26 27 23 The Redd case has been frequently cited over the years. Although limited in some details by subsequent cases, it remains both valid and controlling for all purposes cited herein. See, e.g., Carkonen v. Williams, 76 Wn.2d 617, 625, 458 P.2d 280 (1969) (Redd limited only to extent of possible conflict with uniform valuation requirements). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 43 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 other words, when the Legislature delegates taxing authority under sections 9 and 12, it is able to 2 define the scope and limits of the municipal taxing power. 3 However, once the Legislature has delegated the right to a municipality to impose local 4 taxes for local purposes and the municipality exercises that right by imposing those taxes for an 5 6 authorized local purpose, the Legislature cannot further interfere with this local taxing power. 7 Our founders’ use of the term “vest” in sections 9 and 12 transforms the Legislature’s 8 discretionary delegation of local taxing authority for local purposes into a constitutional right 9 that allows municipalities the continued exercise of that authority for a local purpose until that 10 purpose is fulfilled. By preventing legislative interference with a delegated local tax after it has 11 vested, the founders effectively ensured home rule for the local citizenry. 12 Within the Nineteenth Century context of our constitution, the term “vest” carries a 13 14 particularized meaning. At the time of Washington’s constitutional convention, the primary 15 meaning of “vest” was apparent: “When a person becomes entitled to a right, estate, etc., it is 16 said to vest in him.” Rapalhe and Lawrence, A Dict. of Amer. and English Law, Vol. II (1888) 17 (emphasis added). A contemporaneous U.S. Supreme Court case noted that such vested rights 18 19 connote “an immediate, fixed right of present or future enjoyment” and “an immediate right of present enjoyment, or a present, fixed right of future enjoyment.” Pearsall v. Great N. Ry. Co., 20 21 22 161 U.S. 646, 673, 16 S. Ct. 705, 40 L. Ed. 838 (1896) (internal quotations omitted) (definition adopted in Adams v. Ernst, 1 Wn.2d 254, 264-65, 95 P.2d 799 (1939)). As later noted in Adams, 23 “to be vested, in its accurate legal sense, a right must be complete and consummated, and one of 24 which the person to whom it belongs cannot be divested without his consent.” 1 Wn.2d at 265 25 (internal quotations omitted). Thus, when sections 9 and 12 use “vest,” it incorporates a legal 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 44 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 expectancy and entitlement to the continued exercise of the right to levy local taxes for local 2 purposes. 3 Under section 12, “it is the power to collect taxes which must be vested in the corporate 4 [municipal] authorities.” Carson, 6 Wash. at 258. Once the legislature delegates taxing 5 6 7 8 9 10 11 authority to a municipality for a local purpose and the municipality exercises that taxing authority, such delegation is “absolute and complete:” The power to tax for corporate purposes has been, as stated above, delegated to counties, cities, and other municipal corporations. That delegation of the sovereign power of taxation for local purposes is absolute and complete, subject only to the constitutional restrictions that taxes shall be imposed for public purposes only, levied and collected by local officers only, limited to a certain rate or amount, levied and collected only under general laws, etc. 12 Redd, 166 Wash. at 144-45 (emphasis added). Following a proper delegation and a local 13 decision to exercise that vested power for a local purpose, a legislative decision to “take away” 14 local taxes dedicated for that local purpose violates constitutional guarantees of local self- 15 government. Id. at 139, 143. See 16 EUGENE MCQUILLIN, THE LAW OF MUNICIPAL 16 17 18 CORPORATIONS § 44:9 (3d ed. updated July 2019) (“Provisions as to municipal taxation are frequently contained in state constitutions, and the authority so conferred cannot be interfered 19 with or restricted by legislative enactment, as, for example, by conditioning its exercise by a vote 20 of the electorate.” (footnotes omitted)). Importantly, “no law may retroactively infringe a 21 ‘vested right.’” Serv. Emps. Int’l Union Local 925 v. Dep’t of Early Learning, 450 P.3d 1181, 22 23 1184 (Wash. 2019) (quoting Caritas Servs., Inc. v. Dep’t of Soc. & Health Servs., 123 Wn.2d 391, 413-15, 869 P.2d 28 (1994)). 24 25 The Supreme Court’s decision in Redd supports constitutional limits on the authority of 26 the Legislature to modify a local tax many years after that authority has vested and exercised. In 27 Redd, Franklin County assessed certain properties in connection with local taxes imposed for PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 45 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 local purposes. 166 Wash. at 133. Several years later, a 1931 state law empowered the state, 2 through its tax commission, to reassess those properties in a way that would change their value 3 and thus alter local tax collections. Id. at 134, 136. The county refused to give effect to the tax 4 commission’s reassessment because it violated section 12 by interfering with the local 5 6 assessment and collection of taxes in Franklin County for local purposes. Id. at 134. The en 7 banc Supreme Court held that the 1931 law violated section 12 by interfering with the prior 8 delegation of local taxing authority: 9 10 11 12 13 14 15 It is not within the power of the Legislature to take from the people of counties, cities, and other municipal corporations the right of local self-government secured to them by our Constitution. True, the Constitution is not a grant, but a limitation upon the legislative power, and the Legislature may legislate upon any subject not inhibited by the Constitution. However, the Constitution [Section 12] has limited the power of the Legislature, as stated above. Id. at 139 (emphasis added); see also id. at 155. Similarly, in Longview Co. v. Lynn, 6 Wn.2d 507, 108 P.2d 365 (1940), the Court held unconstitutional a state law that purported to retroactively alter decisions made by the City of 16 Longview in establishing local improvement districts to construct local projects and issuing 17 18 bonds to fund those projects. Id. at 509-10. The Court stated, “To hold that the statute of 1925 19 protects bonds issued for improvements ordered prior to the effective date of the act renders the 20 statute obnoxious to article 11, § 12, of our State Constitution.” Id. at 524. 21 22 23 Plaintiffs anticipate that Defendants will claim that section 9 and 12 vesting arguments are foreclosed by Pierce Cty. I, but the impact of the vesting language in those sections was not argued there. Instead, respondents in Pierce County I claimed only that I-776 violated “precepts 24 25 26 27 of local home rule” under article XI, sections 4 and 12, because the repeal of local MVET authority “imposed a tax on those local governments by requiring them to find other funding sources for local transportation projects.” 150 Wn.2d at 429, 440. Although Pierce Cty. I PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 46 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 correctly points out that state legislative action can rescind unexercised local taxing authority, 2 the case does not address the constitutionality of modifying or eliminating local taxing authority 3 4 that has vested in, been exercised, and is being collected by a local government for local purposes. 24 The Pierce Cty. I Court was not presented with the vesting argument that Plaintiffs 5 6 make to this Court. 25 In accord with section 12, a stable local tax base for local projects is important for the 7 8 viability of local home rule. Economic and policy concerns support the determination by 9 Washington’s founders to preserve local taxing authority against state interference by vesting 10 such authority, once delegated and exercised, in the local municipality. Municipal taxes often 11 cover complicated local projects that require many years to construct. Absent section 12’s 12 vesting of taxing authority to fund these long-term projects, municipal governments would either 13 14 be required to forego the project altogether, or face substantial risk that the project would fail 15 following significant sunk costs. See End Prison Indus. Complex v. King Cty., 192 Wn.2d 560, 16 573-74, 431 P.3d 998 (2018) (pointing out that loss of excess property tax halfway through 17 completion of local project could cause “local governments’ plans and finances [to] be thrown 18 19 into disarray” and would “undermine the will of the voters”). By vesting delegated taxing authority in municipal governments, the home rule provisions of section 12 allow local 20 21 governments to serve the purposes deemed important by the local citizenry. See also Redd, 166 22 23 24 25 26 27 24 Rather than arguing the impact of vesting language in section 9 and the final clause of section 12, the respondents in Pierce Cty. I based their contentions exclusively on article 11, section 4 and the first clause of section 12, which forbids the legislature from imposing local taxes. Hackett Decl., Ex. 1 (Br. at 39). As the Supreme Court properly noted, the gist of respondents’ argument was that “the practical effect of I-776 is to impose local taxes in King and Pierce Counties.” Id. (Br. at 41). This is not the point of Plaintiffs’ argument. 25 The sole place that vesting arose in Pierce Cty. I was with regard to a substantive due process argument. 150 Wn.2d at 441. The court found “[n]o authority” for the proposition that the local citizenry has a vested right derived from substantive due process in public projects. Id. The Court’s statement in this section of the opinion, however, says nothing about the vested home rule rights of a local municipality that are explicitly set out in section 9 and the final clause of section 12. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 47 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 Wash. at 137 (“When a municipal corporation is created, the power of taxation is vested in such 2 corporation as an essential attribute for all the purposes of its existence unless its exercise be in 3 express terms prohibited.”); United States v. City of New Orleans, 98 U.S. 381, 393, 25 L. Ed. 4 225 (1878) (“A municipality without the power of taxation would be a body without life, 5 6 incapable of acting, and serving no useful purpose.”). As all parties must agree, I-976 operates to divest municipal corporations—notably 7 8 TBDs—of a previously delegated, lawfully exercised and vested authority to collect local taxes 9 for local purposes. 26 But this is exactly what section 12 forbids. Neither the Legislature, nor the 10 11 people by initiative may violate the Constitution. See Larson, 156 Wn.2d at 760 (initiative powers must “be exercised in conformity with the constitutionally mandated procedures” 12 (internal quotations omitted)). The Initiative cannot be applied to any local governments that are 13 14 actively utilizing previously vested local taxing authority for local purposes like transit. Because 15 the final clause of section 12 precludes subsequent legislative acts that modify or eliminate 16 vested and adopted local taxing authority for local purposes at a minimum at least until those 17 taxes achieve that local purpose, I-976 is unconstitutional. 18 State Legislation Cannot Nullify a Local Vote or Disenfranchise Local Voters. 19 I-976 violates article I, section 19 of the Constitution by using a statewide vote to 20 interfere with and attempt to undo the results of earlier local elections. Indeed, this was a stated 21 22 purpose behind the Initiative. When he appeared before the Legislature to promote I-976, 23 24 25 26 27 26 Transit is an area of primarily local concern. See Municipality of Metro. Seattle v. O’Brien, 86 Wn.2d 339, 34445, 544 P.2d 729 (1976) (“Whether to levy or not to levy the tax is a local decision, the amount of the tax levied is a local concern subject to the statutory ceiling, the investment of the tax proceeds and their application to either capital or operating transit purposes is a local matter and, finally, whether to pledge the tax to secure bonds is a matter for local determination.”); Kunath v. City of Seattle, 444 P.3d 1235, 1243 n.54 (Wash. Ct. App. 2019) (transit is a local concern). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 48 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 sponsor Tim Eyman admitted that Seattle voters had approved a VLF through a public vote. 27 2 He further admitted that ST3 taxes had been approved by a similar vote, but that I-976 was 3 designed to “give” voters the chance to “re-do” their decision on ST3 because Eyman disagreed 4 with the original election result. Id. 5 Overriding the results of a local vote that was lawful under then-existing law violates the 6 7 plain text of article I, section 19. Section 19 precludes interference with voting and elections: 8 “All Elections shall be free and equal, and no power, civil or military, shall at any time 9 interfere to prevent the free exercise of the right of suffrage.” (emphasis added). The “at any 10 11 time” language makes it clear that election interference is strictly forbidden whether it occurs before, during, or after an election, including subsequent legislation designed to nullify prior 12 election results. Under article I, section 19, as under the federal constitution, the right to vote is 13 14 fundamental. Because the Washington Constitution “specifically confers upon its citizens the 15 right to ‘free and equal’ elections” without state interference, it “goes further to safeguard this 16 right.” Foster v. Sunnyside Valley Irrigation Dist., 102 Wn.2d 395, 404, 687 P.2d 841 (1984). 17 In 2014, Seattle voters overwhelmingly decided to impose local taxes on themselves to 18 19 fund additional bus service and other transportation needs through 2021. Dkt. No. 19 (VerBoort Decl., ¶ 3 & Ex. B). I-976 retroactively invalidates the results of this local vote and infringes 20 21 22 upon the right to self-determination held by residents of local jurisdictions. It affords the 2019 election an unequal (greater) status than the 2014 election by overturning the 2014 election 23 results 13 months before the end of the voter-approved taxation period. This is particularly 24 problematic with respect to the portion of the Seattle VLF that only a Seattle voter could have 25 26 27 27 Testimony of Tim Eyman, Senate Transportation Committee at 27:30 – 29:05 (Feb. 26. 2019), available at https://www.tvw.org/watch/?clientID=9375922947&eventID=2019021568&startStreamAt=1650&autoStartStream= true (last accessed Jan. 10, 2020). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 49 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 approved. The state statute did not allow such taxes to be enacted by the TBD governing 2 authority beyond $50, and the Seattle VLF total was $80 after the 2014 election. Dkt. No. 19 3 (VerBoort Decl., ¶¶ 3-4); see also RCW 82.80.140; RCW 36.73.065. 4 While article I, section 19 “does not require that voters may go to the polls at any time 5 6 and vote on any question as they see fit . . . it does require that otherwise qualified voters who 7 are significantly affected by the results of an election be given an opportunity to vote in that 8 election.” City of Seattle v. State, 103 Wn.2d 663, 673, 694 P.2d 641 (1985) (internal quotations 9 omitted); accord Foster, 102 Wn.2d at 410 (landowners who were “directly and significantly 10 11 affected by [an irrigation] district’s operation” were entitled to “vote in district elections”). A denial of the right to vote under article I, section 19 can occur “directly” or 12 “indirectly.” City of Seattle, 103 Wn.2d at 673. In particular, “‘the right of suffrage can be 13 14 denied by a debasement or dilution of the weight of a citizen’s vote just as effectively as by 15 wholly prohibiting the free exercise of the franchise.’” Gold Bar Citizens for Good Gov’t v. 16 Whalen, 99 Wn.2d 724, 730, 665 P.2d 393 (1983) (quoting Reynolds v. Sims, 377 U.S. 533, 555, 17 84 S. Ct. 1362, 12 L. Ed. 2d 506 (1964)). Such “dilution or debasement” may arise when one set 18 19 of voters is pooled with another in a manner that skews the results of an election or the constitutional right of a specific section of the local electorate to cast a meaningful vote. See, 20 21 22 e.g., Thurston v. Greco, 78 Wn.2d 424, 427-28, 474 P.2d 881 (1970) (recognizing “thread of consistency” in multitude of cases nationwide, including the United States Supreme Court, 23 holding that “[v]otes cast . . . may not be debased to the end that one person’s vote is worth 24 more than another’s because of geographic location” (emphasis added; internal quotations 25 omitted)); see also id. at 434 (Finley, J., concurring) (suggesting that “a dilution of vote” 26 amounts to an “interference with a fundamental right”). 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 50 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 It is beyond dispute that Seattle voters are “directly and significantly affected by” the 2 respective authority to collect revenue for Seattle’s TBD and higher taxes and fees for transit 3 purposes. See Foster, 102 Wn.2d at 410. I-976 strips these voters of a meaningful opportunity 4 to vote on these quintessentially local issues by allowing unaffected voters from outside of these 5 6 localities to dilute their votes. Cf. Gold Bar, 99 Wn.2d at 730-31 (“Each [vote of a nonresident 7 of Gold Bar] denies the voters of Gold Bar the opportunity to select who will govern them by 8 allowing someone who will not be affected by the policies of the officials to influence that 9 decision.”). Indeed, in this case, vote dilution operated to negate the votes of these local voters 10 entirely, as the statewide electorate voted down taxes and fees that the local voters had handily 11 approved in the absence of a state interference. By the same token, Seattle voters 12 overwhelmingly disapproved I-976, only to have their votes diluted to the point of nullification 13 14 15 by the votes of nonresidents with little to no stake in Seattle’s TBD. The effective invalidation and interference with all, or part of the Seattle VLF election 16 result is also contrary to constitutional mechanisms for revisiting election results. For example, 17 the Constitution allows the nullification of a prior election result under the recall mechanisms of 18 19 article 1, sections 33 and 34. The recall provisions acknowledge the importance of having the same set of voters weigh in on an issue, by requiring that the recall petition contain signatures of 20 21 22 a percentage of qualified electors “computed from the total number of votes cast for all candidates for his said office to which he was elected at the preceding election.” Const. art. I, § 23 33. The same principle applies to referenda, as the required number of signatures is based on the 24 number of a votes in a recent statewide election. Const. art. II, § 1(b). Here, instead of the same 25 group of voters revisiting their own earlier decision after a legally mandated process formally re- 26 raises the question for the ballot box, a different group of statewide voters is permitted to 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 51 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 mandate a redo for a local measure. See Foster, 102 Wn.2d at 405-11. This is especially 2 troubling in light of the vote totals from the 2019 election, which show continued majority 3 support for transportation-supporting taxes and fees by the Seattle electorate. For example, the 4 Seattle electorate approved the Seattle-specific VLF in 2014 by over 62% of local voters. Dkt. 5 6 No. 19 (VerBoort Decl., ¶ 3 & Ex. B). By 2019, Seattle voters support for these types of taxes, 7 generally, had only increased, with 76% of these voters rejecting I-976. 28 The lack of direct 8 authority for the unique proposition that a state measure cannot be used to invalidate and 9 interfere with the results of a prior, lawful local election only underscores the degree to which I- 10 976 proceeds beyond democratic norms; this situation is unprecedented. 11 Finally, I-976 not only allowed outside, unaffected voters to singlehandedly decide issues 12 of local concern but incentivized them to do so to the detriment of the local voters. For example, 13 14 a voter residing on the other side of the state from Seattle’s TBD has no stake in Seattle’s VLF 15 but may have wished to support a reduction in other vehicle fees with statewide applicability. 16 By forcing such voters to cast a single up-or-down vote on an entire package of unrelated 17 measures, I-976 left outside voters favoring a reduction in state vehicle licensing fees with no 18 19 choice but to bar Seattle voters from taxing themselves. See supra, Section V.C. To add insult to injury, voters were likely unaware that they were interfering with voter-approved fees, 20 21 22 because the deceptive ballot title assured them otherwise. See supra, Section V.B. Accordingly, I-976 is inconsistent with the fundamental right to “free and equal elections” under Section 19. I-976 Violates Article VII, Section 5 of the Constitution By Improperly Diverting Local Tax Revenue. 23 24 I-976 is also unconstitutional because it changes the object to which local taxes must be 25 26 27 28 See https://results.vote.wa.gov/results/current/State-Measures-Initiative-Measure-No-976.html (searching by precincts SEA) (last visited Jan. 10, 2020); see also https://www.seattletimes.com/seattle-news/politics/majority-ofvoters-paying-sound-transits-car-tab-taxes-opposed-i-976/ (last visited Jan. 10, 2020). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 52 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 applied, contravening article VII, section 5 of the Washington Constitution. That constitutional 2 mandate provides, “No tax shall be levied except in pursuance of law; and every law imposing a 3 tax shall state distinctly the object of the same to which only it shall be applied.” Const. art. 4 VII, § 5 (emphasis added). “[T]he ‘state distinctly’ requirement in article VII, section 5 is 5 6 directed not simply to the method of taxation but rather the relationship between the tax and the 7 purpose of the tax.” Sheehan v. Cent. Puget Sound Reg’l Transit Auth., 155 Wn.2d 790, 804, 8 123 P.3d 88 (2005); see also Sheldon v. Purdy, 17 Wash. 135, 141, 49 P. 228 (1897) (it “is an 9 elementary doctrine in taxation” that article VII, section 5 prevents the “diversion of moneys 10 collected by taxation for a special purpose, and placed in a fund created for such purpose” 11 (emphasis added)). Thus, article VII, section 5 “render[s] unconstitutional actions taken to divert 12 taxes assessed for those purposes into some wholly unrelated project or fund.” Sheehan, 155 13 14 Wn.2d at 804. The most significant issue under article VII, section 5 arises from section 12 of I-976, 15 16 pertaining to Sound Transit. 29 Sound Transit is a regional transit authority created under 17 authority of chapter 81.112 RCW. It is authorized to submit plans to voters to construct and 18 19 operate regional transit supported by taxes designated to implement those plans. Three times voters in the Sound Transit district have approved such plans and specific taxes to implement 20 21 22 23 those plans. These taxes include an MVET, a rental car tax, a sales and use tax, and a property tax. Butler Decl., ¶¶ 3-5. These taxes are voter-approved to be spent on construction of specific transit projects and maintenance and operation of Sound Transit light rail and buses. 24 As explained above, section 12 of I-976 would force Sound Transit to expend tax revenue 25 26 29 27 Plaintiff Camarata, a taxpayer plaintiff and resident within the Sound Transit District, brings this claim as an objection to the diversion of tax revenue within the Sound Transit District. PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 53 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 raised exclusively by statute and approved by voters for the construction and maintenance of 2 high capacity transit instead to retire debt. See supra, Section II.D.3, V.C; Butler Decl., ¶¶ 5, 17. 3 In short, the Sound Transit voters only authorized Sound Transit to collect and expend taxes for 4 specific purposes, and Sound Transit’s authorizing statutes only allow Sound Transit to collect 5 6 and expend taxes as part of plans approved by Sound Transit’s voters. I-976 does not purport to 7 amend Sound Transit’s authorizing statutes to pay off debt as allegedly required by statutes 8 authorizing Sound Transit. And I-976 does not reflect a vote by Sound Transit taxpayers to 9 allow use of these taxes to pay off debt; in fact, the voters in Sound Transit’s district voted 10 11 against I-976. Butler Decl., ¶ 15. A similar issue arises with respect to I-976’s section 6, which purports to repeal RCW 12 82.80.140, the authority to create transportation benefit districts and levy local taxes for 13 14 transportation improvements. Many of these TBDs are created for specific purposes with 15 particular transportation plans or projects in mind. For example, the City of Spokane created a 16 TBD specifically to implement a six-year street improvement plan that began in 2018 and runs 17 through 2023. See Simmons Decl., ¶ 3; Spokane Municipal Code §§ 8.16.010; 8.16.070(A). 18 19 The City of Vancouver created a TBD to complete projects under specified state, regional and local transportation plans. See Lopossa Decl., ¶¶ 1-3; Vancouver Municipal Code § 3.40.060(A) 20 21 22 (“Funds may be utilized for any lawful purposes under RCW Chapter 36.73 and applicable transportation plans, but all funds raised through the transportation benefit district shall be 23 expended only for such purposes.”). I-976 discontinues funding for these projects, in many cases 24 mid-stream. This results in a material deviation between the originally stated object of taxes 25 raised through these TBDs and the more limited deliverables that would ultimately result. For 26 example, Spokane carefully developed a staggered six-year plan for street improvements, but 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 54 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 only a limited portion of that plan will be implemented if funding for the Spokane TBD is 2 terminated. 3 Given that I-976 section 12 purports to require Sound Transit to divert the MVET 4 revenue used for its high capacity transportation system to the early retirement of bond debt, and 5 6 that section six materially modifies the use of TBD funding across the state, I-976 violates article 7 7, section 5. See Sheldon, 17 Wash. at 139-41 (declaring section of code void that purported to 8 require a school district to “divert taxes raised for other purposes” to “the payment of its special 9 local debt”); State ex rel. Latimer v. Henry, 28 Wash. 38, 45-46, 68 P. 368 (1902) (section of act 10 providing that the county must pay costs of improvement in school lands out of its general fund 11 was unconstitutional and void because revenue from the general fund could only be used for 12 general county purposes and such use was not a county purpose). 13 14 15 I-976 Violates Separation of Powers Principles By Intruding on Administrative Matters. The Washington Constitution incorporates foundational separation of powers principles. 16 Zylstra v. Piva, 85 Wn.2d 743, 754, 539 P.2d 823 (1975) (Utter, J. concurring; cited with 17 18 approval by Matter of Salary of Juvenile Dir., 87 Wn.2d 232, 240, 552 P.2d 163 (1976)). 19 Separation of powers is violated when “‘the activity of one branch threatens the independence or 20 integrity or invades the prerogatives of another.’” Auto. United Trades Org. v. State, 183 Wn.2d 21 842, 859, 357 P.3d 615 (2015). In addition, “[t]he Legislature is prohibited from delegating its 22 23 purely legislative functions” to other branches of government. Id. Through initiatives, the people have reserved the right to legislate subject to the same constitutional restrictions that 24 25 confine the Legislature. ATU, 142 Wn.2d at 241. “The people in exercising their reserved 26 powers must conform to the constitution, just as the Legislature must do when enacting 27 legislation.” Id. at 232. Here, I-976 violates the separation of powers by addressing PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 55 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 administrative matters properly left for the executive branch and by improperly delegating 2 legislative powers on effective dates to the executive of local agencies. 3 An action is administrative “if it furthers (or hinders) a plan the local government or 4 some power superior to it has previously adopted.” City of Port Angeles v. Our Water-Our 5 6 Choice!, 170 Wn.2d 1, 10, 239 P.3d 589 (2010). A key question is “whether the proposition is 7 one to make new law or declare a new policy, or merely to carry out and execute law or policy 8 already in existence.” Id. (internal quotations omitted). In Bidwell v. City of Bellevue, 65 Wn. 9 App. 43, 46-47, 827 P.2d 339 (1992), the Court of Appeals further pointed out that “[a]ctions 10 11 relating to subjects of a permanent and general character are usually regarded as legislative, and those providing for subjects of a temporary and special character are regarded as administrative.” 12 I-976 violates separation of powers principles by intruding on multiple local legislatively 13 14 approved projects that are in the administrative stage and forcing the executive branch of local 15 government to address the consequences of each intrusion. Three cases illustrate the point. In 16 Ruano, 81 Wn.2d at 825, an initiative provision sought to halt the Kingdome Stadium project. 17 The project had been approved legislatively and was ongoing. The initiative purported to direct 18 19 the executive to take necessary action to halt the project and any ongoing financial commitments. The Supreme Court held that this initiative was invalid because it exceeded the legislative 20 21 22 function of the initiative power: “We hold that, under the facts of this case, only administrative decisions remained in connection with the stadium project, decisions not subject to the initiative 23 process.” Id. Prior legislative enactments had determined to build a stadium, finance its bonds, 24 and repay those bonds, but the execution of those laws, including the repayment of bonds, was 25 an administrative action outside the proper scope of an initiative. Id. at 824-25. 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 56 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 Similarly, in City of Port Angeles, the Supreme Court rejected an initiative that sought to block fluoridation of the city water supply. Because laws related to fluoridation were well established, it was beyond the initiative power to dictate how those laws were to be executed. 4 See 170 Wn.2d at 14 (“These are not details of a new policy or plan, indicative of a legislative 5 6 act; these are modifications of a plan already adopted by the legislative body itself, or some 7 power superior to it, indicative of an administrative act.” (internal quotations omitted)). 8 Finally, in Bidwell, 65 Wn. App. at 45-46, the city adopted four ordinances that 9 10 11 established the framework for building a convention center, including financing and the issuance of bonds. An initiative filed with the city sought an amendment to the city charter that would require voter approval prior to issuance of any negotiable bonds or notes. Id. The court held that 12 the proposed initiative exceeded the scope of the initiative power because it addressed 13 14 administrative matters. Id. at 48. 15 Not only does I-976 violate separation of powers concerns related to interfering with 16 administrative matters, it also violates separation of powers by unconstitutionally delegating 17 legislative authority on effective dates for certain sections of I-976. It is unconstitutional to 18 19 delegate or transfer legislative authority to others. Brower v. State, 137 Wn.2d 44, 54, 969 P.2d 42 (1998). Determining the effective date of an act is part of the legislative authority. The 20 21 22 Legislature is free to make the effective date of an enactment contingent on “a future event specified by the Legislature,” even when the event arises at the discretion of others. Diversified 23 Inv. Partnership v. Department of Soc. & Health Servs., 113 Wn.2d 19, 28, 775 P.2d 947 (1989) 24 (emphasis added). However, for purposes of determining an unconstitutional delegation of 25 legislative authority, the Supreme Court has distinguished between “conditioning the operative 26 effect of a statute upon the happening of a future specified event” versus “transfer[ring] the 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 57 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 power to render judgment on an issue to a federal legislative or administrative body.” 113 2 Wn.2d at 28 (emphasis added). The Legislature cannot “delegate the power to repeal a statute” 3 because in such a circumstance it “necessarily transfers its power to render judgment as to the 4 continued expediency of the statute.” Id. at 30. The convoluted effective dates set forth in I-976 5 6 section 16 represent an unconstitutional delegation of legislative authority because an entity 7 other than the Legislature is granted the ability to set the timing of compliance based on its 8 judgment, rather than on the happening of a future event specified in the initiative. The exercise 9 of such judgment has significant impacts on the specified statutes. Separation of powers does 10 11 not permit such an unconstitutional delegation of legislative authority. 12 I-976 Violates Article I, Section 12 By Requiring the Use of Kelley Blue Book Valuation. 13 Section 8(2) of I-976 requires the use of Kelley Blue Book (“KBB”) valuation: “For the 14 purposes of determining a tax under this chapter, the value of a truck-type power or trailing unit, 15 or motor vehicle, including a passenger vehicle, motorcycle, motor home, sport utility vehicle, or 16 17 18 light duty truck is the base model Kelley Blue Book value of the vehicle . . ..” See also I-976 Ballot Title (“This measure would . . . base vehicle taxes on Kelley Blue Book Value.”). The 19 KBB valuation method is a proprietary product owed by a private corporation. See Hackett 20 Decl., Ex. 4 (Chang, Kelley Blue Book Sold to AutoTrader.com, New York Times (October 26, 21 2010) (reporting sale of KBB for between $500 million and $1 billion)). It is currently owned by 22 23 the automotive subsidiary of Cox Enterprises, a multi-billion dollar international conglomerate. See generally Hackett Decl., Ex. 5 (https://www.coxenterprises.com (corporate website)). 24 25 Because I-976 specifies the KBB product and requires its use by DOL in computing 26 taxes, the State will presumably be required to enter into a single-source contract with KBB and 27 Cox Enterpises for use of the KBB product due to the many thousands of valuations that DOL PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 58 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 must make each year. Regardless, the initiative ties the State to a particular corporate 2 partnership. The granting of a special privilege to a corporation under these circumstances 3 violates article I, section 12: “No law shall be passed granting to any citizen, class of citizens, or 4 corporation other than municipal, privileges or immunities which upon the same terms shall not 5 6 equally belong to all citizens, or corporations.” The principle purpose of this clause was and is 7 “to prohibit government from granting exclusive privileges or immunities in the field of 8 commercial affairs—that is, to prevent government from conferring special favors on certain 9 business interests to the exclusion of others.” Michael Bindas et. al., The Washington Supreme 10 Court and the State Constitution: A 2010 Assessment, 46 GONZ. L. REV. 1, 23 (2011). In fact, 11 our clause goes even further than Oregon or Indiana constitutions (from which it was originally 12 drawn) by explicitly including “corporations,” thereby reflecting “the delegates' twin distrust of 13 14 corporate strength and legislative weakness.” Id. 15 I-976 violates article I, section 12 by mandating use of a specific corporate vendor for a 16 valuable state contract. As a result, it is invalid. See generally id. at 25 (collecting cases where 17 laws have been invalidated under art. I, sec. 12 for commercial favoritism). 18 I-976’s Repeal of TBDs’ Vehicle Fees Unconstitutionally Impairs Burien’s Bonds. 19 20 The Washington Constitution is clear: “[N]o . . . law . . . impairing the obligations of contracts shall ever be passed.” Const. art. I, § 23. 30 The test for contractual impairment is well 21 22 established: (1) does a contractual relationship exist, (2) does the legislation substantially impair the contractual relationship, and (3) if there is a substantial impairment, is it reasonable and necessary to serve a legitimate public purpose. 23 24 25 26 27 30 Article 1, section 10 of the United States Constitution also provides that “[n]o state shall . . . pass any . . . law impairing the obligation of contracts.” The federal and state provisions are given similar effect. Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 145, 744 P.2d 1032 (1987). PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 59 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 Pierce Cty. II, 159 Wn.2d at 28. Where, as here, legislation impairs a government’s own bond 2 contracts, the law will “face more stringent examination under the Contract Clause than would 3 laws regulating contractual relationships between private parties.” Tyrpak v. Daniels, 124 Wn.2d 4 146, 151, 874 P.2d 1374 (1994) (internal quotations and citations omitted). Under this test, I-976 5 6 7 unconstitutionally impairs Burien’s bonds. Burien entered a valid contractual relationship with its bondholders. 8 “[I]t is well-settled that municipal bonds are contractual obligations protected by the 9 contract clause.” Pierce Cty. II, 159 Wn.2d at 29; see also Tyrpak, 124 Wn.2d at 152. The 10 11 12 contractual obligations in municipal bonds protected by the constitution include “the terms in the municipal bonds, the official statement, the authorizing resolutions, and the statutory provisions governing the applicable municipal corporation in existence when the bonds were issued and 13 14 sold.” Pierce Cty. II, 159 Wn.2d at 30. Here, Burien’s Bond Purchase Contract, Official 15 Statement, Interlocal Agreement, TBD Resolution, and Ordinance—as well as the applicable 16 statutes governing TBD vehicle fee authority—all establish the requisite contractual relationship 17 for an impairment claim. The contract terms include TBD No. 1’s covenant to impose and 18 collect vehicle fees until the Bonds are repaid and Burien’s pledge of that revenue to repayment 19 of principal and interest. See Christensen Decl., Exs. C-E, G; Pierce Cty. II, 159 Wn.2d at 33 20 (pledge of MVET while bonds were outstanding was a term of Sound Transit’s contract with 21 22 23 24 bondholders); O’Brien, 86 Wn.2d at 349-50 (similar as to Metro’s contract with bondholders). The elimination of TBD vehicle fees detrimentally affects the financial framework of and unconstitutionally impairs Burien’s bonds. A contract is impaired by legislation that alters its terms, imposes new conditions, or 25 26 27 lessens its value. Pierce Cty. II, 159 Wn.2d at 30. With respect to municipal bond contracts, a law substantially impairs the contract if it “detrimentally affects the financial framework which PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 60 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 induced the bondholders originally to purchase the bonds, without providing alternative or 2 additional security.” Tyrpak, 124 Wn.2d at 153-54. The Supreme Court has repeatedly held that 3 the financial framework of a bond contract is detrimentally affected and bond obligations are 4 impaired when a law enacted after the bonds were issued diminishes a tax source (i.e., repeals a 5 6 tax or reduces the tax base) pledged to support repayment of bonds. Pierce Cty. II, 159 Wn.2d at 7 31; see also Tyrpak, 124 Wn.2d at 155; O’Brien, 86 Wn.2d at 351-52; Ruano v. Spellman, 81 8 Wn.2d 820, 827, 505 P.2d 447 (1973). Accordingly, the Supreme Court consistently has 9 invalidated laws that attempted to repeal or diminish revenue sources pledged to support 10 11 repayment of bonds. See, e.g., Pierce Cty. II, 159 Wn.2d at 33-34 (I-776’s repeal of MVET both reduced Sound Transit’s bondholders’ security and altered the terms of the bonds in violation of 12 article I, section 23); Tyrpak, 124 Wn.2d at 154-55 (bonds issued by Port of Vancouver and 13 14 secured in part by property taxes were unconstitutionally impaired by annexation law that would 15 have reduced property tax base); Ruano, 81 Wn.2d at 825-29 (repeal of hotel tax impaired 16 county bond contract). 17 18 19 Here, Section 6 of I-976 impacts Burien’s Bonds in the same manner as the laws invalidated in Pierce Cty. II, Tyrpak, and Ruano. Burien undisputedly issued the Bonds long before enactment of I-976 and irrevocably pledged TBD vehicle fees toward repayment of the 20 21 22 Bonds. Section 6’s repeal of the authority to collect TBD vehicle fees in RCW 82.80.140 eliminates a major revenue source pledged to secure Burien’s Bonds, and on which bondholders 23 relied in purchasing the Bonds. Schober Decl., ¶ 6. Accordingly, I-976 detrimentally affects the 24 Bonds’ financial framework. And I-976 offers no alternative or additional security to 25 bondholders; it simply withdraws TBDs’ authority to impose and collect vehicle fees. 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 61 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 Any claim by the State that Burien’s pledge of its “full faith, credit, and resources” eliminates any impairment claim “has no merit and has been soundly rejected by [the Supreme Court].” Pierce Cty. II, 159 Wn.2d at 36 (citing cases). The Supreme Court’s decision in Pierce 4 Cty. I does not hold otherwise. In Pierce County I, the Supreme Court held that I-776 did not 5 6 impair King County bonds issued after I-776 had qualified for the ballot where King County 7 disclosed to bondholders that I-776, if passed, would repeal local option vehicle license fees and 8 made express assurances that the County had sufficient revenues from other sources to repay the 9 bonds. 150 Wn.2d at 438-39. Burien made no such disclosures to its bondholders for the Bonds, 10 which were issued more than nine years before I-976. See Christensen Decl., ¶ 10. Thus, Pierce 11 County I is inapposite. Section 6 impermissibly impairs Burien’s Bonds and is invalid under 12 article I, section 23. 13 14 I-976’s impairment is unjustified. 15 Having found an impairment, the next question is whether the challenged legislation is 16 “nevertheless justified as a reasonable and necessary exercise of the State’s sovereign power.” 17 Tyrpak, 124 Wn.2d at 156 (internal quotations and citations omitted). Here, no such justification 18 exists. The plain language of I-976 indicates the sole purpose for the Initiative is voters’ desire 19 for lower car tab fees. But voters’ intent to change state and local revenue policy does not justify 20 contractual impairment. See Pierce Cty. II, 159 Wn.2d at 37-38 (rejecting claim that a “change 21 22 in tax policy” justified reducing bondholders’ security); Tyrpak, 124 Wn.2d at 156-57 (no 23 justification for impairment when purpose of law is to reduce taxing power of one entity to 24 benefit another); O’Brien, 86 Wn.2d at 350-52 (constitution prevents legislature from 25 withdrawing taxing power or diverting the proceeds to some other use when tax pledged to 26 bonds); Ruano, 81 Wn.2d at 826-27 (repeal of municipal authority to levy tax was “futile and in 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 62 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 violation of the constitution” when repeal reduced bondholders’ security). No other “reasonable 2 and necessary” legitimate public purpose justifying impairment of Burien’s Bonds has been 3 identified. Tyrpak, 124 Wn.2d at 156. I-976’s impairment is unjustified and Section 6 must 4 therefore be invalidated on this additional ground. 5 6 7 8 I-976 Must Be Struck Down Because Its Unconstitutional Provisions Are Not Severable. The existence of a severability clause in I-976 does not matter for certain constitutional violations. Any determination by this court that I-976 violates the Article II, Section 19 single 9 10 11 subject rule invalidates the entire initiative regardless of the severance clause. City of Burien, 144 Wn.2d at 825 (“When an initiative embodies two unrelated subjects, it is impossible for the 12 court to assess whether either subject would have received majority support if voted on 13 separately. Consequently, the entire initiative must be voided.”). The same is true under article 14 II, section 19 for the extraordinary violation of a false or misleading ballot title. Howlett, 17 15 Wash. at 635 (“[A] title which is misleading and false is not constitutionally framed, and will 16 vitiate the act.”). 17 18 Plaintiffs’ remaining constitutional challenges go to the heart of I-976, which also makes 19 it impossible to sever the offending provisions. An invalid provision is unseverable where it is 20 “so connected to the remaining provisions that it cannot be reasonably believed that the 21 legislative body would have passed the remainder of the act’s provisions without the invalid 22 portions, or unless elimination of the invalid part would render the remaining part useless to 23 accomplish the legislative purposes.” League of Women Voters of Wash. v. State, 184 Wn.2d 24 393, 411-12, 355 P.3d 1131 (2015). With respect to initiatives, a court “must determine if the 25 26 27 voters, not the legislature, intended severability.” League of Educ. Voters v. State, 176 Wn.2d 808, 827, 295 P.3d 743 (2013). A court cannot sever when “it could not be believed that the PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 63 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 legislature would have passed one without the other; or where the part eliminated is so intimately 2 connected with the balance of the act as to make it useless to accomplish the purposes of the 3 legislature.” State v. Abrams, 163 Wn.2d 277, 285-86, 178 P.3d 1021 (2008) (internal quotations 4 omitted). 5 6 Here, the explicit purpose of I-976 was to “bring back our $30 car tabs.” The voter’s 7 pamphlet unambiguously represents that “I-976 limits license tabs to a flat, fair, and reasonable 8 $30 per year[.]” Hackett Decl., Ex. 3. The Initiative itself acknowledges that this central 9 purpose can be accomplished only through “[t]his measure and each of its provisions[.]” Dkt. 10 11 No. 24, Ex. A at § 1 (emphasis added). Plaintiffs’ constitutional challenges, either individually or together, eliminate major 12 sections of I-976; whatever remains is not what was voted upon. For example, the pervasive I13 14 976 violations of Article II, Section 37 redline large swaths of the initiative. Similarly, 15 substantial provisions of I-976 fall because they violate local tax vesting requirements under Art. 16 11, § 12; contract impairment provisions under Art. I, § 23; election interference requirements of 17 Art. I, § 19; separation of powers requirements; and/or eliminate the measure’s key promise of 18 19 $30 car tabs. An unconstitutional provision cannot be severed if it is “so connected to the remaining provisions that it cannot be reasonably believed that the legislative body would have 20 21 22 23 24 25 passed the remainder of the act’s provisions without the invalid portion[],” or if “elimination of the invalid part would render the remaining part useless to accomplish the legislative purposes.” League of Women Voters of Wash., 184 Wn.2d at 411-12. Given these widespread constitutional provisions violated by I-976, a pro forma severability clause cannot save it. I-976 must be declared unconstitutional in its entirety. 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 64 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 4 VI. CONCLUSION I-976 had a deceptive ballot title that mislead the voters. It lied about ensuring car tabs would be $30. It combined multiple unrelated subjects to cobble together enough support to get the measure passed, a classic unconstitutional log-rolling guise. I-976 fails to set forth all 5 6 7 statutes it amends rendering its application confusing. It intrudes on local home rule powers of taxation for local purposes, seeks to over-turn local election results, and requires diversion of 8 locally approved taxes. I-976 impairs contract obligations by seeking to eliminate Burien’s VLF 9 that have been pledged to secure its bonds. Each of these matters are constitutional violations 10 requiring that I-976 be struck down. Plaintiffs respectfully request that this Court grant them 11 summary judgment and declare I-976 unconstitutional. 12 This memorandum contains 20,945 words. 13 14 DATED this 10th day of January, 2020. DANIEL T. SATTERBERG King County Prosecuting Attorney PETER S. HOLMES Seattle City Attorney By: s/ Carolyn U. Boies Carolyn U. Boies, WSBA#40395 Erica Franklin, WSBA#43477 Assistant City Attorneys John B. Schochet, WSBA#35869 Deputy City Attorney 20 By: s/ David J. Hackett David J. Hackett, WSBA #21236 David J. Eldred, WSBA #26125 Jenifer Merkel, WSBA #34472 Senior Deputy Prosecuting Attorneys Erin B. Jackson, WSBA #49627 Deputy Prosecuting Attorney 21 Attorneys for King County 22 PACIFICA LAW GROUP LLP 15 16 17 18 19 Attorneys for City of Seattle 23 24 25 26 By /s Matthew J. Segal Paul J. Lawrence, WSBA #13557 Matthew J. Segal, WSBA #29797 Jessica A. Skelton, WSBA #36748 Shae Blood, WSBA #51889 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 65 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 4 Attorneys for Plaintiffs Washington State Transit Association, Association of Washington Cities, Port of Seattle, Garfield County Transportation Authority, Intercity Transit, Amalgamated Transit Union Legislative Council of Washington, and Michael Rogers 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 66 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks 1 2 3 CERTIFICATE OF SERVICE I am and at all times hereinafter mentioned was a citizen of the United States, over the age of 21 years and not a party to this action. On the 10th day of January, 2020, I caused to be served, via the King County E-Service filing system, and via electronic mail per agreement of the parties, a true copy of the foregoing document upon the parties listed below: 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 For Plaintiff King County: David J. Hackett, Attorney David J. Eldred, Attorney Erin B. Jackson, Attorney Jenifer C. Merkel, Attorney Rafael Munoz-Cintron, Legal Assistant David.hackett@kingcounty.gov David.eldred@kingcounty.gov Erin.Jackson@kingcounty.gov Jenifer.merkel@kingcounty.gov rmunozcintron@kingcounty.gov For Defendant State of Washington: Alan D. Copsey, Deputy Solicitor General Alicia Young, Deputy Solicitor General Lauryn Fraas, Assistant Attorney General Karl Smith, Deputy Solicitor General Kristin Jensen, Executive Assistant Rebecca Davila-Simmons, Paralegal Morgan Mills, Legal Assistant Alan.copsey@atg.wa.gov Alicia.young@atg.wa.gov Lauryn.fraas@atg.wa.gov Karl.smith@atg.wa.gov Kristin.jensen@atg.wa.gov Rebecca.DavilaSimmons@atg.wa.gov Morgan.mills@atg.wa.gov Noah.purcell@atg.wa.gov 21 22 23 For Plaintiff City of Seattle: Carolyn U. Boies, Attorney Erica Franklin, Attorney John B. Schochet, Attorney Marisa Johnson, Legal Assistant Carolyn.boies@seattle.gov Erica.franklin@seattle.gov John.schochet@seattle.gov Marisa.Johnson@seattle.gov For Intervenor-Plaintiffs Washington ADAPT, Transit Riders Union and Climate Solutions: Knoll Lowney, Attorney knoll@smithandlowney.com For Intervenor-Defendant Pierce County: Daniel R. Hamilton, Attorney Frank A. Cornelius, Attorney Dan.hamilton@piercecountywa.gov Frank.cornelius@piercecountywa.gov For Intervenor-Defendant Clint Didier: Stephen W. Pidgeon, Attorney spidgeon007@gmail.com For Intervenor-Defendants Timothy Eyman, Michael Fagan and Jack Fagan: Mark D. Kimball, Attorney mkimball@mdklaw.com DATED this 10th day of January, 2020. 24 25 Sydney Henderson 26 27 PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT - 67 20284 00002 ja09cp07dg.003 Contact Information for Individual Plaintiffs’ Counsel Found Within Signature Blocks