Whether a drainage fee is an unauthorized tax under the Headlee Amendment or a valid user fee; Const 1963, art 9, § 31; The Bolt factors; Bolt v Lansing

Holding that the drainage charge at issue is a valid user fee, the court denied plaintiffs’ requests for relief under the Headlee Amendment. Plaintiffs challenged a drainage charge under the Headlee Amendment. Ultimately, the special master found they were not entitled to relief because the drainage charge is a valid user fee, not an unauthorized tax subject to the Headlee Amendment. On appeal, the court agreed with the special master and defendants and adopted “the special master’s findings and conclusions except with respect to [her] analysis of the third Bolt factor.” First, the “evidence supports the special master’s conclusion that the drainage charge serves a regulatory purpose rather than a revenue-raising purpose. The first Bolt factor thus weighs in favor of the charge being a valid user fee rather than a disguised tax.” Second, the “evidence supports the special master’s conclusion that the drainage charge is proportionate to the necessary costs of the service provided. The second Bolt factor thus weighs in favor of the charge being a valid user fee rather than a disguised tax.” Third, the court agreed with plaintiffs that, under the third Bolt factors, the drainage charge is not voluntary, but this did not change the outcome. “Overall, plaintiffs have failed to carry their burden of demonstrating that the drainage charge is a disguised tax rather than a permissible user fee. The first and second Bolt factors favor that the drainage charge is a proper user fee. Although analysis of the third Bolt factor indicates that the drainage charge is effectively compulsory, ‘the lack of volition does not render a charge a tax, particularly where the other criteria indicate the challenged charge is a user fee and not a tax.’” As such, the drainage charge is “a permissible user fee that is not subject to the Headlee Amendment.”