## F I L E D United States Court of Appeals Tenth Circuit 

### MAR 23 1999 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

JOEL MARCUS and DAVID V. MORANDO, on their own behalf and all others similarly situated, Plaintiffs - Appellants,

v. No. 97-3313 STATE OF KANSAS, DEPARTMENT OF REVENUE, Defendant - Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS (D.C. No. 96-CV-4140-DES)

___________________________ Stephen R. Senn of Peterson & Myers, P.A., Lakeland , Florida (John J. Miller of Law Offices of John J. Miller, P.A., Overland Park, Kansas; and Robert Joseph Antonello of Antonello & Fegers, Winter Haven, Flor ida, with him on the briefs), for Plaintiffs-Appellants. Joseph Brian Cox, Special Assistant Attorney Genera l (Richard Cram with him on the brief), Legal Services Bureau, Kansas Department of Revenue, Topeka, Kansas, for Defendant-Appellee.

Before BRISCOE , McKAY , and LUCERO , Circuit Judges.

__________________________ McKAY , Circuit Judge.

_________________________1 The regulations enacted by the Department of Justic e are entitled to

substantial deference. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 844 (1984). “Moreover, because Con gress mandated that the ADA regulations be patterned after the sec tion 504 coordination regulations [of the Rehabilitation Act], the formerregulations have the force of law.” Helen L. v. DiDario , 46 F.3d 325, 332 (3d Cir.), cert. denied , 516 U.S. 813 (1995). -2- Plaintiffs Joel Marcus and David V. Morando appeal the district court’s dismissal of their action pursuant to Federal Rule of Civil Procedure 12(b)(1). Because their claims arose under the Americans withDisabilities Act, 42 U.S.C. §§ 12101-12213, Plaintiffs asserted federal jurisdi ction pursuant to 28 U.S.C. § 1331. However, the district court determined that the Tax Injunction Act, 28 U.S.C. § 1341, deprived it of jurisdiction over the subject matter of the action and accordingly dismissed the action without reaching i ts merits.

I. Title II of the ADA requires public entities to ens ure that “no qualified individual with a disability shall, by reason of su ch disability, be excluded from participation in or be denied the benefits of the s ervices, programs, or activities” provided by the entities. 42 U.S.C. § 12132. Cong ress directed the Department of Justice to develop regulations to implement the public services provisions of Title II. See 42 U.S.C. § 12134(a). 1 In accordance with Congress’ mandate, the Department of Justice developed regulations requiri ng that where parking is-3-

provided for public buildings, a certain number of parking spaces on “the shortest accessible route of travel from adjacent parkingto an accessible entrance” must be specially designated for people with disabilitie s. 28 C.F.R. Ch. 1, pt. 36, App. A § 4.6.2 (Accessibility Guidelines for Buildings and Facilities). The Department of Justice regulations further provide: A public entity may not place a surcharge on a part icular individual with a disability or any group of individuals with disabilities to cover the cost of measures, such as the provision of auxi liary aids or program accessibility, that are required to provide that individual or group with the nondiscriminatory treatment requiredby the Act or this part. Id. § 35.130(f). The intent of this surcharge provisi on is to “prevent[] disabled persons from being denied access to ADA-mandated be nefits or services because they do not have the funds to pay for them, and [to ] spread[] the costs of such benefits or services to all taxpayers.” Thrope v. Ohio , 19 F. Supp.2d 816, 819 (S.D. Ohio 1998) (citing McGarry v. Director, Dep’tof Revenue, Mo. , 7 F. Supp.2d 1022, 1028 (W.D. Mo. 1998)). To comply with the ADA regulations set forth above, the State of Kansas has enacted a statutory scheme governing the provis ion of parking accommodations for individuals with disabilities. Under the Kansas scheme, persons who qualify as “individuals with disabiliti es” may park in specially designated parking spaces so long as they have an i dentification card and display a special license plate, a permanent parking placar d, or a temporary placard on or-4-

in their vehicles. See Kan. Stat. Ann. §§ 8-1,124 & 8-1,125(a). Both the license plates and the placards must “display the internati onal symbol of access to the physically disabled.” Id. § 8-1,125(a). Using a designated parking space wi thout a special license plate or placard is punishable as a misdemeanor. See id. § 8- 1,129. Other than the general vehicle registration fee cha rged to all automobile owners, there is no additional charge for the licen ce plate entitling the holder to use parking accommodations set aside for people with disabilities. See id. § 8- 1,125(b). To obtain a placard and an identificatio n card, however, qualified individuals must pay a total of $5.25, along with a n additional $5.25 renewal charge every three years. The first portion of the $5.25 assessment consists of a “service fee” in the amount of $2.25 which is paid to the county treasurer. See id. § 8-145d. This portion of the assessment is impose d on all persons applying for vehicle registration or renewal, not only on indivi duals applying for disabled parking placards. See id. County treasurers must deposit the $2.25 into “th e special fund created pursuant to K.S.A. [§] 8-145.” Id. Section 8-145 expressly appropriates the “special fund” “for the use of the county treasurer in paying for necessary help and expenses incidental to the admin istration of duties in accordance with the provisions of this law and extr a compensation to the county treasurer for the services performed in administeri ng the provisions of this act.”-5-

Id. § 8-145(b). If there is a balance in the fund at the close of a calendar year, the money is “withdrawn and credited to the general fun d of the county.” Id. The money in the general fund is then remitted to the s ecretary of revenue, deposited with the state treasurer, and credited to the state highway fund. See id. § 8- 145(c). The remaining portion of the $5.25 charge is author ized by statute. See id. § 8-1,125(c) (“The secretary of revenue may adopt rules and regulations prescribing a fee for placards and individual ident ification cards issued pursuant to this section . . . .”). Accordingly, the Kansas Department of Revenue promulgated the following regulation: The fee for any placard issued to a handicapped per son or any person responsible for the transportation of a handicappedperson pursuant to L. 1986, Ch. 36, Sec. 1 shall be $2. The fee fo r any individual identification card issued to a handicapped person pursuant to L. 1986, Ch. 36, Sec. 2 shall be $1. Kan. Admin. Regs. § 92-51-40. The statute authoriz ing the collection of these funds indicates that these fees “shall not exceed t he actual cost of issuance” of the identification cards and placards. See Kan. Stat. Ann. § 8-1,125(c). Plaintiffs are citizens of the State of Kansas and both qualify as persons with disabilities within the meaning of section 8-1 ,124 of the Kansas Statutes. In pursuing this action, they also seek to represent aclass of persons who similarly qualify as persons with disabilities under section 8-1,124. Defendant State of-6-

Kansas, Department of Revenue, is responsible for the administration of the statutory scheme at issue in this case. In their c omplaint, Plaintiffs alleged that Defendant’s imposition of a fee for parking placard s and individual identification cards violates 42 U.S.C. § 12132 of the ADA and 28 C.F.R. § 35.130(f), the regulatory surcharge provision. Plaintiffs sought injunctive and declaratory relief and repayment with interest of the monies collected by Defendant from Plaintiffs and their class members in violation of the ADA. D efendant filed a motion to stay discovery and class certification shortly afte r filing its answer to the complaint. Defendant argued that because the prima ry issues raised were ones of law and because “legal briefing or dispositive moti ons” would resolve these issues, discovery was unnecessary. Appellant’s App . at 21B. Plaintiffs opposed the motion to stay class certification but indicate d that a stay of discovery might be appropriate if the parties could stipulate to th e relevant facts. The district court granted Defendant’s motion to stay discovery and class certification and directed the parties to file stipulated facts. Con sequently, the parties submitted a stipulation of the facts relevant to this dispute. After Plaintiffs filed a motion for summary judgment, Defendant filed a motion to dismiss pursuant to Rules 12(b)(1) and 12 (b)(6) of the Federal Rules of Civil Procedure. Defendant advanced several argume nts in support of its motion. The district court granted Defendant’s motion to di smiss based on the argument-7-

that the charge for the placards and identification cards was a tax and not a regulatory fee and that, as such, the Tax Injunctio n Act deprived the court of subject matter jurisdiction. See Marcus v. Kansas, Dep’t of Revenue , 980 F. Supp. 398, 402-03 (D. Kan. 1997). The Tax Injuncti on Act provides in full: “The district courts shall not enjoin, suspend, or restrain the assessment, levy or collection of any tax under State law where a plain , speedy and efficient remedy may be had in the courts of such State.” 28 U.S.C. § 1341. In reaching its conclusion that the charge was a ta x, the district court examined each component of the charge. Initially, the court noted that the $2.25 assessment collected by county treasurers as a “service fee” did not bear a relation to the cost of the service provided nor did it appe ar to be regulatory in nature.
See Marcus , 980 F. Supp. at 402. The court also remarked that the $2.25 assessment is imposed not only on persons applying for disabled parking placards but also on all persons applying for vehicle registration. See id. The court believed that “[s]uch general application may indic ate a revenue raising intent.” Id. The court then stated that the remaining $2.00 fo r the placard and the $1.00 for the identification card, which are authorized b y section 92-51-40 of the Kansas Administrative Regulations, also “bear[] no relation to cost.” Id. The court justified this conclusion by stating that at least a portion of this money is directed to the State Highway Fund, which, “in turn , is used for expenditures that-8-

ultimately benefit the general public.” Id. (citing Kan. Stat. Ann. § 68-416(b)(3)). The court concluded that, even if some portion of t he fee were regulatory in nature, it could not assert jurisdiction over such portion “without ‘doing violence to the revenue raising provisions of the measure.’” Id. at 403 (citations omitted). The court went on to explain that even if the Tax I njunction Act applies, federal courts may still assert jurisdiction if the state f ails to provide a “plain, speedy, and efficient remedy” in the state courts. Id. Because Plaintiffs did not allege the absence of such a remedy, however, this exception t o the Tax Injunction Act did not apply. See id. On appeal, Plaintiffs contend that: the district c ourt should have allowed discovery on the issue of whether the charge at iss ue in this case is a regulatory fee or a tax for purposes of the Tax Injunction Act ; the district court’s ruling that the charge at issue was a regulatory fee and not a tax was erroneous in any event; and statements of congressional intent surrounding the Tax Injunction Act show that the Act was not meant to preclude federal juri sdiction in cases like this one. We exercise jurisdiction pursuant to 28 U.S.C. § 12 91. Our review of the district court’s dismissal for la ck of subject matter jurisdiction is de novo. See Painter v. Shalala , 97 F.3d 1351, 1355 (10th Cir. 1996). The Federal Rules of Civil Procedure instru ct that “[w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the-9-

subject matter, the court shall dismiss the action. ” Fed. R. Civ. P. 12(h)(3). Because the jurisdiction of federal courts is limit ed, “there is a presumption against our jurisdiction, and the party invoking fe deral jurisdiction bears the burden of proof.” Penteco Corp. v. Union Gas Sys., Inc. , 929 F.2d 1519, 1521 (10th Cir. 1991). “A court lacking jurisdiction ca nnot render judgment but must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” Basso v. Utah Power& Light Co. , 495 F.2d 906, 909 (10th Cir. 1974).

II. The issue before us is whether a state-imposed asse ssment for disabled parking placards constitutes a tax or a regulatory fee for purposes of the Tax Injunction Act. The resolution of this issue is de terminative of whether federal jurisdiction exists in this case. The Tax Injuncti on Act imposes a “broad limitation on federal court interference with state collection of taxes [and] is not limited to injunctive relief. The Tax Injunction A ct bars declaratory relief, and suits for damages as well.” Brooks v. Nance , 801 F.2d 1237, 1239 (10th Cir. 1986) (internal citations omitted). The purposes o f the Act are “to promote comity and to afford states the broadest independen ce, consistent with the federal constitution, in the administration of their affair s, particularly revenue raising.”2 This court previously has noted that “the statutorylimitations of the Tax

Injunction Act are not jurisdictional; rather, theydefine the scope of remedies a federal court may grant in a suit challenging taxes levied under state law.” ANR Pipeline Co. v. LaFaver , 150 F.3d 1178, 1186 n.8 (10th Cir. 1998), cert. d enied , __ S. Ct. __, 1999 WL 24700 (U.S. Jan. 25, 1999); s ee also id. at 1191 (“[T]he Act clearly functions as a limitation on the equita ble remedies a federal court may provide in a property tax dispute that otherwise ha s appropriate federal court subject-matter jurisdiction, i.e., federal question jurisdiction or diversity jurisdiction.”). However, the United States Suprem e Court has stated that it has “interpreted and applied the Tax Injunction Act as a ‘jurisdictional rule’ and a ‘broad jurisdictional barrier.’” Arkansas v. Farm Credit Servs. of Cent. Ark. , 520 U.S. 821, 825 (1997) (quoting Moe v. Confederated S alish & Kootenai Tribes , 425 U.S. 463, 470 (1976)); see also Rosewell v. LaSalle Nat’l Bank , 450 U.S. 503, 522 (1981) (“[T]he Act . . . [is] first and fo remost a vehicle to limit (continued...) -10- Wright v. McClain , 835 F.2d 143, 144 (6th Cir. 1987); accordCollins Holding Corp. v. Jasper County, S.C. , 123 F.3d 797, 799 (4th Cir. 1997) (explaining that the Tax Injunction Act “reflects the importance of the taxing power to the operation of state governments” and the goal of pre venting federal courts from interfering with state revenue collection); Thrope , 19 F. Supp.2d at 822 (“The Tax Injunction Act is based on principles of federalismand is designed to prevent a federal court from interfering with the administrat ion of a state tax system.”). Thus, the Tax Injunction Act “operates to divest th e federal courts of subject matter jurisdiction over claims challenging state t axation procedures where the state courts provide a ‘plain, speedy and efficientremedy.’” Lussier v. Florida, Dep’t of Highway Safety & Motor Vehicles , 972 F. Supp. 1412, 1417 (M.D. Fla. 1997) (citation omitted). 22 (...continued)

drastically federal district court jurisdiction to interfere with so important a local concern as the collection of taxes.”); Brooks , 801 F.2d at 1240-41 (holding that Tax Injunction Act deprived federal district courts of subject-matter jurisdiction in action involving tax on cigarettes); May v. Supr eme Court of Colo. , 508 F.2d 136, 137 (10th Cir. 1974) (stating that “28 U.S.C. § 1341 does not operate to confer jurisdiction but instead limits jurisdictionwhich might otherwise exist”), cert. denied , 422 U.S. 1008 (1975). For example, the Supreme C ourt held in California v. Grace Brethren Church , 457 U.S. 393, 396 (1982), that the Tax Injunction Act barred the federal district court fr om exercising jurisdiction over the case. In accordance with these Supreme Court p recedents, we treat the Tax Injunction Act as a bar to federal jurisdiction ove r cases involving the enjoinment, suspension, restraint, levy, or collect ion of taxes imposed by states. See 28 U.S.C. § 1341.

3 The Court of Appeals for the Fourth Circuit recentl y affirmed the dismissal of a lawsuit involving an ADA challenge t o the charges imposed for handicapped parking placards by the State of North Carolina. See Brown v. North Carolina Div. of Motor Vehicles , __ F.3d __, 1999 WL 66089, *8-*9 (4th Cir. Feb. 12, 1999) (holding that the suit was barred be cause the state was entitled to sovereign immunity under the Eleventh Amendment). But cf. Alsbrook v. City of Maumelle, Ark. , 156 F.3d 825, 830-31 (8th Cir.) (holding that def endant was not immune from suit because Congress did not exceed it s powers under Section 5 of the Fourteenth Amendment in enacting the ADA), vacated on reh’g en banc (Nov. 12, 1998); Seaborn v. Florida, Dep’t of Corre ctions , 143 F.3d 1405, 1407 (11th Cir. 1998) (concluding that states do not hav e Eleventh Amendment immunity from suits filed under the ADA), cert. den ied , __ S. Ct. __, 1999 WL 80727 (Feb. 22, 1999); Coolbaugh v. Louisiana , 136 F.3d 430, 438 (5th Cir.) (same), cert. denied , __ U.S. __, 119 S. Ct. 58 (1998); Clark v. Califo rnia , 123 F.3d 1267, 1270-71 (9th Cir. 1997) (same), cert. de nied sub. nomWilson v. Armstrong , __ U.S. __, 118 S. Ct. 2340 (1998). In Brown , the dismissal of the case was based on a finding that 28 C.F.R. § 35.130 (f) exceeded Congress’ powers under Section 5 of the Fourteenth Amendment and that, as a result, (continued...) -11- To date, no federal circuit court has addressed the precise issue of whether assessments imposed for disabled parking placards c onstitute taxes or fees under the Tax Injunction Act. 3 Among the federal district courts to address the issue,3 (...continued)

Congress could not abrogate state sovereign immunity. See Brown , 1999 WL 66089, at *8-*9. Because neither of the parties in this case raised the issue of sovereign immunity, Brownhas no bearing on this decision. -12- however, a clear split has developed. At least in part, the split appears to be due to the precise manner in which the collected funds are used under each state’s statutory scheme. In addition to the District of K ansas decision on review here,

see Marcus , 980 F. Supp. at 402-03, two other district courts have determined that assessments imposed by states on applicants for dis ability parking placards constitute “taxes” for purposes of the Tax Injuncti on Act, resulting in a bar to federal jurisdiction. See Hedgepeth v. Tennessee , __ F. Supp.2d __, 1998 WL 966124, *3 (W.D. Tenn. Dec. 29, 1998) (holding thatthe Tax Injunction Act barred federal jurisdiction partly because $20.50 h andicap placard fee and $3.00 renewal fee apportioned into state’s highway fund, general fund, police pay supplement fund, and trooper safety were revenue ra ising measures and thus constituted taxes); Lussier , 972 F. Supp. at 1420 (holding that revenue raisin g was the dominant purpose of statutory scheme under whic h the majority of the monies collected was remitted to the Department of HighwaySafety and that “the ultimate use of the funds collected . . . make[s] c lear that the funds are spent on general public purposes”). However, two additional federal district courts recently reached the opposite conclusion. See Banta v. Louisiana , No. 98-765-A,-13-

slip op. at 4-5 (M.D. La. Jan. 7, 1999) (denying pl aintiffs’ motion to remand to state court because Tax Injunction Act did not prec lude federal jurisdiction over suit involving regulatory fees for hang tags, ident ification cards, and special license plates which were explicitly tied to the co st of issuance); Thrope , 19 F. Supp.2d at 823 (holding that Tax Injunction Act didnot bar federal jurisdiction because $5.00 assessment was charged only to applic ants for parking placards and was designed to cover the regulatory costs of issui ng the placards, even though the charge was deposited into the bureau of motor v ehicles fund). Several other federal district courts have concluded that charges for parking placards similar to those imposed in this case violate the ADA, but non e of these courts have addressed the Tax Injunction Act. See Duprey v. Connecticut, Dep’t of Motor Vehicles , 28 F. Supp.2d 702, 708-11 (D. Conn. 1998) (granti ng plaintiff’s crossmotion for summary judgment and holding that fee vi olated ADA because it constituted a surcharge, was imposed only on person s with disabilities, and was used to cover the costs of ADA-mandated measures); McGarry , 7 F. Supp.2d at 1029 (granting plaintiffs’ summary judgment motion and concluding that $2.00 fee imposed for parking placards violated ADA); Dar e v. California, Dep’t of Motor Vehicles , No. CV96-5569 JSL, 1997 U.S. Dist. LEXIS 23158, at *1-*3 (C.D. Cal. May 30, 1997) (granting partial summary judgment in favor of plaintiffs and holding that state’s imposition of b iennial $6.00 fee for disabled-14-

parking placards violates surcharge provision of AD A).

III. In determining whether the Tax Injunction Act bars federal jurisdiction over a suit challenging a state assessment, we mustdetermine whether the assessment at issue is a tax or a regulatory fee. See Collins Holding , 123 F.3d at 799. If the assessment is a tax, then the Act appl ies and operates to bar federal jurisdiction unless the state does not provide a pl ain, speedy and efficient remedy.
See id. Whether the assessment is a tax or a regulatory fee is a question of federal law. See Wright , 835 F.2d at 144. The label given by a state for an assessment or charge is not dispositive. See id. ; accordCumberland Farms, Inc.
v. Tax Assessor , 116 F.3d 943, 946 (1st Cir. 1997). Instead, the critical inquiry focuses on the purpose of the assessment and the ul timate use of the funds. See Collins Holding , 123 F.3d at 800 (“[T]he heart of the inquiry cent ers on function, requiring an analysis of the purpose and ultimate u se of the assessment.”); Hager v. City of West Peoria , 84 F.3d 865, 870-71 (7th Cir. 1996) (“Rather thana question solely of where the money goes, the issue is whythe money is taken.”); San Juan Cellular Tel. Co. v. Public Serv. Comm’n , 967 F.2d 683, 685 (1st Cir. 1992) (stating that in close cases courts “have ten ded . . . to emphasize the revenue’s ultimate use”).-15-

[T]he classic tax sustains the essential flow of re venue to the government, while the classic fee is linked to some regulatory scheme. The classic tax is imposed by a state or m unicipal legislature, while the classic fee is imposed by an agency upon those it regulates. The classic tax is designed to provi de a benefit for the entire community, while the classic fee is designed to raise money to help defray an agency’s regulatory expenses. Home Builders Ass’n of Miss., Inc. v. City of Madis on, Miss. , 143 F.3d 1006, 1011 (5th Cir. 1998) (footnotes omitted) (holding that impact fee imposed by City of Madison constituted a tax for purposes of Tax In junction Act); accordFolio v. City of Clarksburg, W.Va. , 134 F.3d 1211, 1217 (4th Cir. 1998) (“A tax is generally a revenue-raising measure, imposed by a l egislative body, that allocates revenue ‘to a general fund, and [is] spent for the benefit of the entire community.’ A user fee . . . is a ‘payment[] given in return fo r a government provided benefit’ and is tied in some fashion to the payor’s use of the service.” (citations omitted)); San Juan Cellular , 967 F.2d at 685 (stating that the classic tax rai ses money which is contributed to a general fund and spent for the benefit of the whole community while the classic fee serves regulatory purposes an d “is imposed by an agency upon those subject to its regulation”). We begin our analysis with the $2.25 portion of the assessment imposed by section 8-145d of the Kansas Statutes. While some part of the funds collected pursuant to section 8-145d may ultimately reach the general fund of the county,

see Kan. Stat. Ann. § 8-145(b), or the state highway f und, see id. § 8-145(c), the-16-

governing statute expressly ties these monies to th e administration of the motor vehicle registration laws. See id. § 8-145(b) (explaining that the “special fund” is “appropriated for the use of the county treasurer i n paying for necessary help and expenses incidental to the administration of duties ” under this law); see also Board of Comm’rs v. Ferguson , 151 P.2d 694, 697 (Kan. 1944) (describing “special fund” under section 8-145 as “created to m eet the [county] treasurer’s administrative expenses”); XVI Kan. Op. Att’y. Gen. 27 (1982) (stating that the fees collected pursuant to section 8-145 are deposi ted into a special fund which is used to pay for necessary help and expenses incidental to administering the motor vehicle registration laws). Only if there is a bal ance remaining at the end of the year will any of these monies reach the general cou nty fund. See Kan. Stat. Ann. § 8-145(b)-(c). Because there is no guarantee thatany funds will remain in the special fund at the close of any given calendar yea r, there is no guarantee that any of the monies remitted to the special fund will rea ch the general county fund or the state highway fund in any given year. The Kans as Supreme Court has confirmed this interpretation of section 8-145 by h olding that the legislative intent surrounding the statute demonstrates that “no part of the fees shall be considered as part of the general funds of the county, except as to the balance, if any, remaining in the special fund at the close of the c alendar year.” Ferguson , 151 P.2d at 697 (declining to issue writ of mandamus to county treasurer directing him-17-

to deposit fees collected pursuant to section 8-145 into general fund of the county). Both the relevant statutory language and Kansas case law make clear that the $2.25 portion of the assessment is used pr imarily to cover the costs of administering the motor vehicle registration laws. Therefore, we cannot say that the dominant purpose of these funds is revenue rais ing, nor can we conclude that the funds benefit the general public. While the fu nds may benefit that portion of the public which owns and operates motor vehicles, the essential character of the $2.25 charge is regulatory. Not only are the charg es expressly linked to a specific regulatory scheme but also the monies collected pur suant to the charge are used to defray the expenses associated with administering the scheme. As such, we conclude that the assessment constitutes a fee for purposes of the Tax Injunction
Act. The remaining portion of the $5.25 assessment charg ed for disabled parking placards and identification cards consists of the $ 3.00 imposed by section 92-51- 40 of the Kansas Administrative Regulations. Neith er the governing statutes nor the implementing regulations indicates the ultimate use of the monies collected pursuant to section 92-51-40. Further, although th e Department of Revenue enacted section 92-51-40, the regulation imposing the $3.00 assessment, it is not clear to whom the funds are remitted. Both the dis trict court and Defendant assert that at least some portion of these monies flows to the state highway fund. See-18-

Marcus , 980 F. Supp. at 402; Appellee’s Br. at 2. Presum ably, the court and Defendant base this conclusion on the assumption th at the charges at issue constitute either “registration and certificate of title fees” under section 8-145(a) or are deposited into the special fund under sectio n 8-145(b) of the Kansas
Statutes. In our view, the ultimate disposition and use of th e funds collected pursuant to section 92-51-40 is an issue that can only be re solved by discovery. However, like the $2.25 portion of the total assessment, the se charges are expressly linked to defraying administrative costs. The Kansas statute authorizing the imposition of these charges explicitly mandates that fees impo sed by the Department of Revenue “shall not exceed the actual cost of issuan ce.” Kan. Stat. Ann. § 8- 1,125(c). Moreover, even if the fees imposed pursu ant to section 92-51-40 are appropriated to the special fund and distributed ac cordingly, then the reasoning we employ above with respect to the $2.25 portion o f the assessment also applies to the $3.00 charge. In other words, the assessment is expressly tied to the administrative costs of a specific regulatory schem e and, therefore, its essential character is regulatory. We conclude that the char ges imposed pursuant to section 91-52-40 constitute fees for purposes of the Tax In junction Act. Because the Tax Injunction Act does not apply to th is action, we reverse the judgment of the district court and remand so th at the court may proceed with4 Because we hold that the Tax Injunction Act does no t apply to this action,

we need not reach the question of whether Kansas pr ovides a plain, speedy, and efficient remedy in its courts. -19- the merits. 4
REVERSED and REMANDED

.