February 24, 2025
Pamela Washington
D.C. Department of Motor Vehicles
95 M Street, S.W.
Washington, D.C. 20024
Re: Comments on Motor Vehicles, Department of - Notice of Proposed Rulemaking - Amending 18 DCMR Ch. 30 - Automated Traffic Enforcement Reduction Pilot, Notice ID: N139428
On behalf of National Taxpayers Union Foundation (“NTUF”), we write with comments on the District of Columbia Department of Motor Vehicles’ (the “Department”) notice of proposed rulemaking Notice ID number N139428 entitled, Comments on Motor Vehicles, Department of - Notice of Proposed Rulemaking - Amending 18 DCMR Ch. 30 - Automated Traffic Enforcement Reduction Pilot (proposed January 24, 2025) (the “Proposed Rule”).
NTUF’s Taxpayer Defense Center advocates for taxpayers in courts, protecting taxpayers from unfair tax administration. At the Taxpayer Defense Center, one of our focus areas where we have litigated are states pursuing tax or fee schemes that violate the Dormant Commerce Clause of the U.S. Constitution.1 Given this background, we write that the Proposed Rule violates the Commerce Clause. The Proposed Rule discriminates against out-of-state, low-income individuals in favor of in-state, low-income individuals. Although providing a pilot program to assist low-income individuals is a noble endeavor, imposing penalties on non-DC resident drivers in order to provide refunds to DC resident drivers is not a legitimate purpose as established by federal case law. Therefore, as we explain below, the Proposed Rule as drafted violates the Commerce Clause’s requirement of nondiscrimination.
I. The Proposed Rule Violates the Commerce Clause.
The Proposed Rule establishes a red light traffic fine reduction to low-income D.C. residents but denies the same to low-income non-residents. In other words, fines on non-residents shall in practice be higher than fines on residents for the exact same offense, and fines will be collected from non-residents at the same time that fine reductions will be provided to residents. This violates the nondiscrimination requirement of the Commerce Clause.
The Proposed Rule functions to provide a reduced red light traffic camera ticket for a low-income, D.C. resident. Under the Proposed Rule, a qualifying person may receive a one-time fifty percent reduction an any $100 ticket (or less) that is issued by an automated traffic enforcement system over the pilot program’s period.2 A “qualifying person” is an individual who
(1) Owns a vehicle registered in the District of Columbia that received a notice of infraction described in paragraph (b);
(2) Resides in the District of Columbia; and
(3) Is a member of a household that receives Supplemental Nutrition Assistance Program benefits, as documented by a proof of benefits letter dated no earlier than 90 days prior to the date of the publication of the final rules regarding the Program.3
Notably, a nonresident who would otherwise qualify based on low-income status is not considered a “qualifying person” under the Proposed Rule. If a qualifying person applies for, and is granted a fine reduction, he will receive a ticket reduction.4 However, if an individual applies for a ticket reduction but is deemed ineligible, then he must pay the ticket “within the time period set forth in the notice of infraction.”5
The Commerce Clause gives Congress the “power to ‘regulate Commerce . . . among the several States.’”6 “[T]he very purpose of the Commerce Clause was to create an area of free trade among the several States.”7 Indeed, “[o]ne of the fundamental purposes of the Clause ‘was to insure . . . against discriminating State legislation.’”8 Under the dormant aspect of the Commerce Clause, “a State may not tax a transaction or incident more heavily when it crosses state lines than when it occurs entirely within the State.”9 To permit states to “enact laws that favor local enterprises at the expense of out-of-state businesses ‘would invite a multiplication of preferential trade areas destructive’ of the free trade which the Clause protects.”10 Thus, states’ statutes which “clearly discriminate against interstate commerce are routinely struck down[,]”11 and those which discriminate against “interstate commerce on their face are ‘virtually per se invalid.’”12
In Complete Auto Transit v. Brady, the U.S. Supreme Court held that a state enactment does not impermissibly burden interstate commerce if it meets each of four tests: (1) the taxed activity has substantial nexus to the taxing state; (2) the tax is fairly apportioned among states; (3) the tax does not discriminate against interstate commerce; and (4) the tax is fairly related to services provided by the taxing state.13 It is this third point that we wish to draw attention to in relation to this proposed rulemaking.
Courts have routinely held state laws which discriminate against interstate commerce to be unconstitutional. In Camps Newfound/Owatonna, Inc., the Court held a Maine law violated the Commerce Clause because it provided a real estate and property tax break for Maine charities but denied it to Maine charities that benefitted nonresidents.14 In Bacchus Imports, Ltd., the Court held a twenty percent Hawaii liquor tax which exempted certain local liquors was “clearly discriminatory, in that it applies only to locally produced beverages, even though it does not apply to all such products.”15 The Court in Maryland v. Louisiana, 451 U.S. 725 (1981), struck down a Louisiana tax on any imported, nontaxed gas as unconstitutional because the tax “unquestionably discriminates against interstate commerce in favor of local interests as the necessary result of various tax credits and exclusions.”16 In Boston Stock Exchange v. State Tax Commission, the Court struck down as unconstitutional a New York law which taxed out-of-state sales of securities transactions more heavily than in-state sales.17 In Dean Milk Company v. City of Madison, the Court held a Wisconsin statute which limited milk sold in Wisconsin to that processed and bottled within five miles of the city violated the Commerce Clause.18
The Proposed Rule here is discriminatory in the same manner as those invalidated statutes. The Proposed Rule allows a low-income resident to claim a credit against his traffic fine while a low-income nonresident cannot do so. In fact, the fines collected from nonresidents will be subsidizing the fine reductions for residents, a clear violation of the Commerce Clause. To be constitutional, low-income residents and low-income nonresidents must be placed on equal footing: either both eligible for reductions in fines imposed on them, or both ineligible.
II. Recommendation: The Department Should Provide all Low-Income Individuals the Opportunity to Obtain a Red Light Traffic Camera Fine Reduction.
In order to alleviate the Proposed Rule’s constitutional issues, the Department should rewrite the Proposed Rule to provide a red light traffic camera fine reduction for low-income individuals regardless of their residency.
Since D.C. is at the center of a large metropolitan area into which multiple states’ residents travel with their automobiles to conduct commerce, it is inevitable that a nonresident, low-income individual will receive a red light traffic camera fine. However, the Proposed Rule, as written, discriminates against these individuals, violating the nondiscriminatory principle of the Commerce Clause. To ensure the pilot program complies with the Constitution, the Department should provide both in-state and out-of-state low-income individuals with the opportunity to apply and be eligible for a reduced fine.
III. Conclusion
The Proposed Rule facially discriminates against interstate commerce and, thus, violates the Commerce Clause. Given that D.C. is a large city in close proximity to other states, low-income individuals from other states are frequently driving within D.C., using their automobiles as instruments of interstate commerce. To exclude nonresident, low-income individuals from the opportunity to reduce the fine of their red light traffic tickets, while providing resident, low-income individuals with such an opportunity, is discriminatory. Such discrimination violates the Commerce Clause.
Even if the Proposed Rule is in support of the noble endeavor of assisting low-income individuals, this does not diminish the fact this goal must be accomplished through non-discriminatory means of providing the same opportunity for all low-income individuals regardless of resdiency. Absent the Department rewriting the Proposed Rule to ensure this discrimination does not occur, the Proposed Rule is facially discriminatory and per se invalid under the Commerce Clause.
Sincerely,
Lindsey Carpenter
Attorney, National Taxpayers Union Foundation
Joe Bishop-Henchman
Executive Vice President, National Taxpayers Union Foundation
1 Joe Bishop-Henchman & Lindsey Carpenter, Supreme Court Declines to Consider Double Taxation Case, NTUF, https://www.ntu.org/foundation/detail/supreme-court-declines-to-consider-double-taxation-case (Jan. 13, 2025); Joe Bishop-Henchman & Lindsey Carpenter, NTUF Defends Small Business Owners Against Double Taxation in New Case, NTUF, https://www.ntu.org/foundation/detail/ntuf-defends-small-business-owners-against-double-taxation-in-new-case (Nov. 3, 2023); Tyler Martinez, Protecting Pork Production: TDC Weighs in to Argue California Went Too Far, NTUF, https://www.ntu.org/foundation/detail/protecting-pork-production-tdc-weighs-in-to-argue-california-went-too-far (June 17, 2022).
2 See 18 DCMR 3006.7(a), (b), (e).
3 18 DCMR 3006.7(c).
4 See 18 DCMR 3006.7(d)-(e).
5 18 DCMR 3006.7(h).
6 Comptroller of Treasury of Maryland v. Wynne, 575 U.S. 542, 545 (2015) (quoting U.S. Const. art. 1, § 8, cl. 3).
7 Bos. Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 328 (1977) (quoting McLeod v. J. E. Dilworth Co., 322 U.S. 327, 330 (1944)).
8 Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 271 (1984) (quoting Welton v. Missouri, 91 U.S. 275, 280 (1876)).
9 Am. Trucking Associations, Inc. v. Scheiner, 483 U.S. 266, 280 (1987) (internal quotation marks omitted) (quotation omitted).
10 Bos. Stock Exch., 429 U.S. at 329 (quoting Dean Milk Co. v. Madison, 340 U.S. 349, 356 (1951)).
11 New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 274 (1988).
12 Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 575 (1997) (quoting Fulton Corp. v. Faulkner, 516 U.S. 325, 331 (1996)).
13 Complete Auto Transit v. Brady, 430 U.S. 274 (1976).
14 See id.
15 Bacchus Imports, Ltd., 468 U.S. at 271.
16 Maryland v. Louisiana, 451 U.S. 725, 731, 756 (1981).
17 See Bos. Stock Exch., 429 U.S. at 319, 332.
18 Dean Milk Co. v. City of Madison, Wis., 340 U.S. 349, 350, 354 (1951).