Aspen, CO Win's Lawsuit Defending Their Carryout Bag Ordinance
The City of Aspen, CO adopted a local law placing a fee on carryout bags in 2011. The ordinance bans single-use plastic bags in Aspen’s grocery stores and imposes a $0.20 fee per paper bag used by most shoppers in Aspen’s grocery stores and was meant as an environmental and public health protection measure to incentivize shoppers to use reusable bags in order to reduce the environmental impacts and waste generated by single-use paper and plastic bags. Colorado Union of Taxpayers Foundation sued Aspen in 2012, challenging the constitutionality of the Ordinance, claiming that $0.20 per bag fee is really a tax that should have been submitted to a vote of the people.
Last week, Pitkin County District Court Judge John F. Neiley found fin favor of the City on motions for summary judgment. Below are excerpts from the opinion.
The City counters that the bag charge is a “fee” and not a “tax” and therefore free from the limitations imposed by TABOR. The City denies the pertinent allegations in the Complaint. Both parties seek summary judgment on the specific question of whether the twenty cent paper bag charge is a “tax” or a “fee” for purposes of TABOR. Having considered the arguments and statements of counsel, both in the written briefs and at oral argument, and being otherwise fully advised, the Court now makes the following findings of fact and conclusions of law:
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The City provides a separate form for the remittance of the bag charge, and the Grocer is tasked with compliance and accounting functions in connection with the collection and remittance of the bag charge. In the first year of the Ordinance, Grocers were allowed to keep up to $1,000 per month of the bag charges collected to offset the compliance, training and education costs of the Ordinance. In subsequent years, Grocers are allowed to retain a maximum of $100 per month.10. Once the bag charge is collected by the City, the Ordinance requires that the funds be paid to the City Finance Department and deposited in the “Waste Reduction and Recycling Account” administered by the City Environmental Health Department. The Ordinance mandates that the funds collected “shall not be used to supplant funds appropriated as part of an approved annual budget” and that none of the funds “shall revert to the General Fund at the end of the fiscal year, or at any other time, but shall be continually available for the uses and purposes set forth” in the Ordinance. The uses are limited to the “Waste Reduction Program.”11. The uses and purposes of the Waste Reduction Program are defined in section (g) of the Ordinance. They include the purchase and distribution of reusable shopping bags to residents and visitors, the implementation of education programs regarding the impacts of trash and disposable bags on the environment and the City’s waste stream, the funding of waste reduction and recycling programs, purchasing and installing recycling containers and waste
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The bag charge at issue here has characteristics of both a tax and a fee. The Court’s analysis necessarily begins with a determination of purpose and intent of the Ordinance when it was passed. “To determine whether a government mandated financial imposition is a ‘fee’ or a ‘tax,’ the dispositive criteria [sic] is the primary or dominant purpose of such imposition at the time the enactment calling for its collection is passed.” Barber, 196 P.3d at 248. To determine how the City intended to use the monies generated by the bag charge, the Court first looks “to the language of the enabling statute for its expression of the primary purpose for the original imposition of that charge.” Id. at 249. If the language discloses that the primary purpose for the charge is to raise revenues for general governmental spending, then it is a tax. If the language shows the charge is to finance a particular service that is reasonably related to charge assessed and that the charge is not intended for general government services, then the charge is a fee.
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The word “revenue” never appears in the Ordinance. Instead, the bag charge is intended as a deterrent to the use of disposable bags, (a behavior the City finds objectionable), and as a means to reduce the impacts and costs of that behavior on the City. The fact that the Ordinance incidentally generates some revenue is not determinative; the salient inquiry is whether that is the primary goal of the Ordinance and whether that revenue is intended for general government spending. The fact that a fee incidentally or indirectly raises revenue does not alter its essential character as a fee, transforming it into a tax. Western Heights Land Corp. v. City of Fort Collins, 362 P.2d 155, 158 (Colo. 1961). The Court finds that the primary goal and intent of the Ordinance is to deter the use of disposable bags, not generate revenue. The bag charge is therefore not a tax.
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[CONCLUSION AND ORDER]
Reasonable minds can differ on the wisdom or propriety of the City’s decision to regulate disposable bags. The issue reflects the continual tug of war between the government’s desire to regulate and the citizens’ right to be left alone. The Court’s task in this case is not to decide what is reasonable or resolve issues that are inherently political. The Court’s task is to consider only whether the bag charge is a tax or a fee under the standards set by established precedent. The Court finds that the bag charge is a fee. To the extent CUTF and others disagree with this analysis, a ballot initiative is already in the offing.
The Court finds that CUTF has failed to meet its evidentiary burden of showing beyond a reasonable doubt that the Ordinance is unconstitutional in violation of TABOR. The City’s bag charge is not a tax for purposes of TABOR because the primary purpose of the Ordinance is not to generate revenues for general government spending. The bag charge also meets the definition of a fee under applicable Colorado case law and is therefore not subject to TABOR. Accordingly, the Court hereby ORDERS that CUTF’s Motion for Summary Judgment is DENIED.
The Court further finds that the City has demonstrated by a preponderance of the evidence that the Ordinance is a fee and not a tax as a matter of law. Accordingly, the Court hereby ORDERS that the City’s Motion for Summary Judgment is GRANTED. Judgment is hereby entered in favor of the City and the individual Defendants and against the Plaintiff CUTF on all matters raised in the Complaint.
View the officials court documents here.