Opinion ID: 1353617
Heading Depth: 1
Heading Rank: 6

Heading: Monies Collected by the Department of Transportation for Violations of Axle Weight Limits

Text: Based on the dissenting opinion in the Court of Appeals, defendants Tippett and Howard appealed the issue of whether the clear proceeds of payments collected by the North Carolina Department of Transportation (DOT) pursuant to N.C.G.S. § 20-118(e) are subject to Article IX, Section 7. The majority in the Court of Appeals determined that the penalties were assessed for unlawful conduct under N.C.G.S. § 20-115 and were, thus, payable to the public schools. N.C. Sch. Bds. Ass'n, 160 N.C.App. at 269, 585 S.E.2d at 429. The dissenting judge agreed with defendants that the penalties were assessed to compensate the State for damage caused to the highways by the operation of overweight vehicles and were not payable to the public schools. The dissenting judge further concluded that the annual registration fee and penalties for overweight vehicles are `compensatory taxes for the use and privileges of the public highways of this State' which are paid into the Highway Fund to finance the maintenance of roads, and are, accordingly, remedial not punitive. Id. at 285-87, 585 S.E.2d at 438-40 (quoting N.C.G.S. § 20-97 (2001)). On appeal to this Court, defendants contend that the majority of the Court of Appeals erred and argue that the penalties assessed against the owners of overweight vehicles are reimbursement for damages or are a tax. We disagree. For purposes of licensing, the weight of a self-propelled property-carrying vehicle is determined by the empty weight and the heaviest load to be carried as declared by the owner or operator, with limitations and calculations specified in the statute. N.C.G.S. § 20-88(a) (2003). A vehicle driven with a weight in excess of its declared gross weight is subject to axle-group weight penalties under N.C.G.S. § 20-118(e) as determined by the amount the actual gross weight exceeds the declared gross weight. Id. § 20-88(k) (2003). Section 118(b) establishes axle weight limitations, and subsection (e) of section 118, entitled Penalties, prescribes civil penalties for operating a vehicle in violation of the axle weight limits, calculated on a graduated scale based on the pounds in excess of the limit. Id. § 20-118(b) and (e) (2003). This penalty is assessed against the owner or registrant of the vehicle. Id. § 20-118(e). Finally, N.C.G.S. § 20-115 declares that [i]t shall be unlawful for any person to drive or move or for the owner to cause or knowingly permit to be driven or moved on any highway any vehicle or vehicles of a size or weight exceeding the limitations stated in this title. Defendants first argue that the Court of Appeals erred in finding the conduct unlawful pursuant to N.C.G.S. § 20-115. Defendants base this assertion on their contention that N.C.G.S. § 20-115 is directed to the driver of the vehicle, while N.C.G.S. § 20-118(e) is directed to the owner or registrant of the vehicle. Defendants next argue that, since pursuant to N.C.G.S. § 20-118(e) a violation of section 118 is not punishable under N.C.G.S. § 20-176 as an infraction or violation of the criminal law, the penalty for violation of the weight limit is not punitive in nature. Neither of these arguments has merit. By its plain language N.C.G.S. § 20-115 is directed at both the driver and the owner of the vehicle. Further, the law is well settled that Article IX, Section 7 applies to both civil and criminal penalties. Mussallam, 321 N.C. at 508-09, 364 S.E.2d at 366-67. Thus, the fact that a violation is not punishable as a crime does not establish that the penalty is not penal in nature. Defendants also argue that the civil penalty is remedial in nature in that the payments compensate the State for damages to the highways caused by overweight vehicles. Defendants rely heavily on the affidavit of the Deputy Chief for Operations of the DOT, who opined that [a]lthough many other factors contribute to road failures, in my opinion overweight vehicles accelerate the deterioration of pavements which causes premature failures of the roadways in this state which the Department of Transportation repairs. Defendants argue that the use of a graduated scale based on excess pounds to calculate the penalty signifies that the penalty has a reasonable relationship to the injury caused and that because these funds are deposited in the Highway Fund, the penalty is remedial rather than punitive. We do not find these arguments persuasive. As plaintiffs note, nothing in the record supports a conclusion that a correlation exists between the graduated scale for the penalties and the cost of repair to the highways. The scale is a measure of the degree of the violation. Moreover, funds deposited in the Highway Fund are used for purposes other than repair and maintenance of roadways damaged by overweight vehicles. As noted earlier, this Court has recognized restitution in the context of Article IX, Section 7 only when the damages were specifically quantified. Shore, 290 N.C. at 633-34, 227 S.E.2d at 559. We similarly reject defendants' argument that the penalty is a tax. As plaintiffs observe, the underlying premise to defendants' argument is that the licensing and registration fee imposed in N.C.G.S. § 20-88(a) is a tax although the statute makes no mention of a tax. Defendants then argue that N.C.G.S. § 20-97 supports the claim that the registration fee is a tax, but N.C.G.S. § 20-97 does not suggest that registration fees are taxes. Furthermore, the statutes cited by defendants, namely, N.C.G.S. §§ 20-88, 20-85, and 20-87, refer to fees and are contained in Part 7 of Article 3 entitled Title and Registration Fees. Section 20-85(b) directs that all but one of the title and registration fees collected under the statute are to be paid into the Highway Trust Fund, not the Highway Fund, as provided for the taxes referenced in N.C.G.S. § 20-97. Defendants' reliance on Helvering v. Mitchell is also misplaced in that Mitchell dealt with the issue of whether a tax penalty under the Internal Revenue Code constituted criminal punishment for purposes of the Double Jeopardy Clause. 303 U.S. at 398-99, 58 S.Ct. at 632-33, 82 L.Ed. at 921. Moreover, the underlying rational of the United States Supreme Court's decision is not applicable in the context of penalties collected under N.C.G.S. § 20-118(e). These penalties are not a safeguard to protect the State's revenues nor is there evidence that punishment of the owners of overweight vehicles entails extensive investigation or litigation. Id. at 401, 58 S.Ct. at 634, 82 L.Ed. at 923. Throughout Article 3, the General Assembly referred to the penalties in N.C.G.S. § 20-118(e) as a civil penalty. The language chosen manifests the legislature's intent that the penalty be imposed to punish those who own motor vehicles operating on the highways of the State while carrying loads that exceed the statutory weight limitations, conduct which violates the State's motor vehicle laws and is deemed unlawful. N.C.G.S. § 20-115 (2003). That the violation causes harm supplies the rational basis for imposing the penalty but does not undermine the intent of the legislature to punish those who cause the harm. We hold, therefore, that payments under N.C.G.S. § 20-118(e) are subject to Article IX, Section 7 and belong to the public schools.