in the middle of 1983 that its tax exemption under § 78 of the Compact excused it from liability under § 44(c)(2) of the LHWCA. The Court is called upon to determine whether this assertion is accurate and tenable.
A. Contributions Under Section 44(c)(2) Do Not Constitute Taxation
WMATA argues in support of its contention that it has a tax-exempt status, that the contributions required by the LHWCA constitute a tax and not some other form of payment from which it would not be exempt. In support of this argument, it relies upon Massachusetts v. United States, 435 U.S. 444, 55 L. Ed. 2d 403, 98 S. Ct. 1153 (1978).
However, the Court concludes that defendant's reliance on this case is misplaced. Massachusetts v. United States involved a determination whether a charge was a tax or a user fee under the Airport and Airway Revenue Act of 1970. The test enunciated
in that case was specifically tailored to address the question of whether a "registration tax" imposed by the federal government constituted an abuse of the federal taxing powers so as to interfere with a state's ability to perform essential services. The Court did not undertake to define a tax for general purposes and the specific factual and legal context in which that case arose makes it an undesirable precedent to govern the instant litigation. By contrast, several other cases indicate that an involuntary payment is a tax when it is assessed upon persons or property in order to raise general revenue to defray the public expense. Pace v. Hannibal, 680 S.W. 2d 944 (Mo. 1984); Nebraska Public Power District v. Hershey School District, 207 Neb. 412, 299 N.W. 2d 514 (1980); Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc., 521 S.W. 2d 578 (Tenn. 1975). This general rule suggests that contributions used to supply a specific fund with a specific purpose -- in this case providing supplemental benefits in second injury cases -- are not "taxes" within the meaning of the WMATA Compact.
The funds contributed under § 44(c)(2) of the LHWCA do not in a general sense finance the public expense. To the contrary, these funds are utilized only to provide supplemental benefits in second injury or upgraded compensation cases. As such, they hardly can be viewed as a tax, as generally defined.
B. Even if Contributions Under Section 44(c)(2) Constitute Taxation, Tax Exemption Does Not Apply
If the contribution into the special fund is not a tax, then there is no statutory exemption shielding WMATA from liability. However, even if the contribution were to be viewed as a tax, the statutory exemption would not apply in this case, based on the controlling statutory construction, legislative history, judicial interpretation and congressional policy.
1. Statutory Construction
By its very terms, the exemption does not shield WMATA from liability under LHWCA § 44(c)(2). It only protects WMATA from taxes and assessments
on its property, its activities or its revenues. Contrary to defendant's position, this is not an all-inclusive exemption, but rather one which is limited to specified areas. This is not to say that an exemption from taxes on property, activities and revenues is not a broad exemption. Such an exemption, however, is not so broad so as to preclude any taxation whatsoever. This statutory construction is consistent with the approach employed in this Circuit:
An intention on the part of the legislature to grant an exemption from the taxing powers of the state will never be implied from language which will admit of any other reasonable construction.
Washington Chapter of American Institute of Banking v. District of Columbia, 92 U.S. App. D.C. 139, 203 F.2d 68, 70 (D.C. Cir. 1953). Therefore, the payments to the special fund, even if considered a tax, are not included in the exemption because the payments are not taxation of property, activities or revenues.
2. Legislative History
The legislative history on the statutory sections under consideration underscores that the intention of Congress was not to exempt WMATA from making contributions into the fund. The House Judiciary Committee Report provides in part:
Section 78. Tax Exemption. - Declares that the creation of the Authority and its purposes are for the benefit of the people of the signatory States and is for a public purpose and that the Authority and the Board will be performing governmental functions. Provides further that the property, activities, and revenues of the Authority and of the Board shall be exempt from all Federal, State, District of Columbia, municipal, and local taxation.