Andrew Hedgepeth , Celia Burson , David McC Leary v. State of Tennessee , State of Tennessee Department of Safety

1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0197P (6th Cir.)
File Name: 00a0197p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
ANDREW HEDGEPETH , C ELIA
BURSON , DAVID M CC LEARY ,
and GAYNELL M ETTS, on
behalf of themselves and all
others similarly situated,
Plaintiffs-Appellants,
v.
S TATE OF TENNESSEE , S TATE
OF TENNESSEE DEPARTMENT
OF S AFETY , and MIKE GREEN ,
in his official capacity as
Commissioner of the State of
Tennessee Department of
Safety,
Defendants-Appellees.
;>

1
No. 99-5166
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 97-02825—Jerome Turner, District Judge.
Argued: March 14, 2000
Decided and Filed: June 12, 2000

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2 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
*The Honorable Jerome Farris, Circuit Judge of the United States
Court of Appeals for the Ninth Circuit, sitting by designation.
Before: RYAN, MOORE, and FARRIS,* Circuit Judges.
_________________
COUNSEL
ARGUED: Michael F. Rafferty, HARRIS, SHELTON,
DUNLAP & COBB, Memphis, Tennessee, for Appellants.
Mary M. Collier, OFFICE OF THE ATTORNEY
GENERAL, CIVIL LITIGATION & STATE SERVICES
DIVISION, Nashville, Tennessee, for Appellees.
ON BRIEF: Michael F. Rafferty, HARRIS, SHELTON,
DUNLAP & COBB, Memphis, Tennessee, Alex Saharovich,
NAHON & SAHAROVICH, Memphis, Tennessee, for
Appellants. Mary M. Collier, OFFICE OF THE ATTORNEY
GENERAL, CIVIL LITIGATION & STATE SERVICES
DIVISION, Nashville, Tennessee, for Appellees.
FARRIS, J., delivered the opinion of the court, in which
RYAN, J., joined. MOORE, J. (pp. 15-19), delivered a
separate dissenting opinion.
_________________
OPINION
_________________
FARRIS, Circuit Judge.
BACKGROUND
Andrew Hedgepeth, Celia Burson, David McCleary, and
Gaynell Metts are disabled individuals who brought this
action on September 12, 1997, under the federal Americans
with Disabilities Act, 42 U.S.C. § 12101, et seq., against the
State of Tennessee, the State of Tennessee Department of
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
19
Because the essential character of Tennessee’s assessment
for disabled parking placards is regulatory, I would hold the
Tax Injunction Act inapplicable to the plaintiffs’ suit.

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18 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
Tennessee’s assessment for disabled parking placards
therefore has all the characteristics of a regulatory fee. First,
although Tennessee’s assessment was imposed by the
Tennessee legislature, the responsibility for administering and
collecting the assessment lies with a regulatory agency, the
Department of Safety. Second, the assessment is imposed on
only a narrow class of persons. Finally, as I have explained,
the assessment is connected to the cost of the program, thus
suggesting a regulatory purpose.
At bottom, Tennessee’s assessment is analogous to a
license or permit fee, which is a paradigmatic regulatory fee.
See National Cable Television Ass’n, Inc. v. United States,
415 U.S. 336, 340-41 (1974) (“Taxation is a legislative
function . . . . A fee, however, is incident to a voluntary act,
e.g., a request that a public agency permit an applicant to
practice law or medicine or construct a house or run a
broadcast station. The public agency performing those
services normally may exact a fee for a grant which,
presumably, bestows a benefit on the applicant, not shared by
other members of society.”). As with a permit fee,
Tennessee’s assessment is voluntary and is charged for the
privilege of obtaining a benefit. While the State may generate
some additional revenue from the program, the program
confers a benefit on the disabled passenger different from that
enjoyed by the general public. Cf. United States v. River Coal
Co., 748 F.2d 1103, 1106 (6th Cir. 1984) (holding that mining
reclamation fees were taxes, and so nondischargeable in
bankruptcy, by distinguishing reclamation fees from permit
fees: “[The reclamation fee] is imposed as an additional
charge on operators who have already received permits.
Unlike the permit fee, the reclamation fee does not confer a
benefit on the operator different from that enjoyed by the
general public when environmental conditions are improved.
On the contrary, it is an involuntary exaction for a public
purpose . . . .”).
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
3
Safety, and Mike Green, the Commissioner of the Tennessee
Department of Safety.
The State of Tennessee charges a sum for the issuance and
renewal of disabled parking placards pursuant to the Disabled
Drivers Law of 1975, Tenn. Code Ann. § 55-21-101, et seq.
The placards allow disabled persons equal access to public
and private facilities by making available various parking
accommodations. The State of Tennessee Department of
Safety charges disabled persons (or those who provide
transportation services for them) a fee of $20.50 for vehicle
registration and for a placard that is valid for two years, and
$3.00 for replacement or renewal of the placard every two
years thereafter. Plaintiffs contend that the State’s fees are
surcharges that discriminate against individuals with
disabilities in violation of the ADA. The force of Plaintiffs’
contention is that a public entity may not permissibly charge
the disabled for measures taken to provide the
nondiscriminatory treatment required by the Act. See 42
U.S.C. § 12132; 28 C.F.R. § 35.130(f). The complaint seeks
damages under the ADA, as well as declaratory and injunctive
relief.
The State moved to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(1) arguing that: (1) the district court
did not have subject matter jurisdiction because the State’s
charges were “taxes” for purposes of the Tax Injunction Act;
(2) the court lacked jurisdiction because the State is immune
from such a lawsuit under the Eleventh Amendment; and (3)
Plaintiffs’ claims were barred by the statute of limitations.
The district court dismissed Plaintiffs’ complaint on
December 28, 1998. It determined that the State’s assessment
for the disabled parking placards was a tax for purposes of the
Tax Injunction Act and that Plaintiffs had a “plain, speedy,
and efficient remedy” to contest the matter at the state level.
Alternatively, the district court held for purposes of appellate
review that the complaint should also be dismissed on

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4 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
1Although the district court dismissed the action under Fed. R. Civ.
P. 12(b)(1), the court addressed the State’s contention regarding Eleventh
Amendment immunity for purposes of appellate review. However, we
hold this issue in abeyance pending the disposition of three other cases,
and thus decline to discuss Eleventh Amendment immunity here.
2In light of our determination regarding the Tax Injunction Act, we
do not reach the issue of the applicable statute of limitations for claims
brought under Title II of the ADA.
grounds of Eleventh Amendment immunity1 and the statute
of limitations.2
DISCUSSION
I. Whether the Federal Courts Lack Jurisdiction Over
Plaintiffs’ Complaint Pursuant to the Tax Injunction Act.
A. Standard of Review
We review de novo a district court's order dismissing a
complaint for lack of subject matter jurisdiction under Fed. R.
Civ. P. 12(b)(1). See Moir v. Greater Cleveland Reg'l Transit
Auth., 895 F.2d 266, 269 (6th Cir. 1990). When the
defendant challenges subject matter jurisdiction through a
motion to dismiss, the plaintiff bears the burden of
establishing jurisdiction. See id. The district court's factual
findings made in resolving a motion to dismiss are reviewed
for clear error while its application of the law to the facts is
reviewed de novo. See RMI Titanium Co. v. Westinghouse
Elec. Corp., 78 F.3d 1125, 1135 (6th Cir. 1996).
B. The Tax Injunction Act
The district court’s jurisdiction turns on the application of
the Tax Injunction Act, which provides that “[t]he 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. The purposes of the Act are “to
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
17
2We are unfortunately presented with little information regarding the
cost of the initial placard issuance program. The State contends that the
actual cost of the placard is 45.4 cents. J.A. at 54 (Irwin Dep.). Because
the $20.50 assessment significantly exceeds the actual cost of the placard,
the State argues that the assessment is best seen as a general revenue
raising measure. The majority agrees, stating that “[t]he only evidence in
the record regarding any costs associated with the State’s disabled parking
program is the actual cost of the disabled parking placard.” Ante, at p. 10.
However, the actual cost of the placard is not the only cost associated
with the regulatory program, as is evidenced by the fiscal note support
form.
3The majority believes that the fiscal note support form does not
support an inference that the monies collected from the renewal program
help to defray the program’s cost, explaining that we do not know the
reasons why the Tennessee legislature decided to reduce the amount of
the assessment from $5 to $3. The legislature’s rationale for reducing the
amount of the assessment is, however, immaterial. The important fact is
that, as enacted, the amount of revenue collected from the program
roughly parallels the cost of the program’s administration, which is
suggestive of a regulatory purpose.
became law provided for a renewal charge of $3 bi-annually,
rather than $5. J.A. at 57 (Irwin Dep.).
The plaintiffs argue that this form shows a correlation
between the cost of the renewal program and the revenue
generated therefrom. A $5 assessment would have generated
$500,000 in revenue bi-annually and resulted in a large
revenue surplus. However, the plaintiffs explain that the $3
renewal charge that was eventually enacted into law generates
only $300,000 in revenue, essentially “cover[ing] the
Division’s cost of administering the program.” Appellant’s
Br. at 16. While the correlation is not exact, the fiscal note
support form does reveal a relationship between the
assessment and the cost of the renewal program.2 In
conjunction with the earlier version of the statute the form
suggests that the ultimate purpose of the assessment is to
defray the costs of administering the disabled parking placard
program.3

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16 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
1The majority disagrees with this reasoning; it states that, because
disabled passengers must pay the same amount for a placard that all
persons must pay to register their vehicles, “[d]isabled persons are merely
being taxed in the same way that non-disabled persons are being taxed.”
Ante, at p. 10 n.5. The majority’s conclusion rests on the premise that the
“regular fee for passenger motor vehicles,” TENN. CODE A NN. § 55-21-
103 (1998), is a tax within the meaning of the Tax Injunction Act, which
is not at all clear.
In the instant case, there is a connection between the
assessment and the costs of the regulatory scheme. First, the
evolution of the statutory provision at issue shows that the
charge for parking placards is connected to cost. The current
language reads: “If the applicant is eligible for a disabled
license plate, the placard shall be furnished without charge.
If the applicant has not applied for vehicle registration, then
the cost of the placard shall be the same as the regular fee for
passenger motor vehicles, as provided in § 55-4-111.” TENN .
C ODE ANN . § 55-21-103 (1998). However, as first enacted,
the Disabled Drivers Law of 1975 did not specify an amount
to be charged for placards, but provided that “[t]he actual cost
of the placard shall be paid by the handicapped driver.”
TENN . C ODE ANN . § 55-21-103 (1980 Replacement). The fact
that the early version of the provision tied the assessment to
cost suggests that the purpose of the assessment is
regulatory.1
Additionally, the plaintiffs point to a fiscal note support
form that was prepared by the Division of Title and
Registration to comment on the fiscal effect of Senate Bill
No. 1831. The bill proposed that the Disabled Drivers Law
be amended to provide for the renewal of permanent placards
every two years for a fee of $5. J.A. at 56-57 (Irwin Dep.); 85
(Fiscal Note Support Form). The Division of Title and
Registration estimated the fiscal impact of the bill to be
$204,100 bi-annually. J.A. at 86 (Fiscal Note Support Form).
With a charge of $5 per placard, it was estimated that the bill
would generate $500,000 in revenue during that same time
period. J.A. at 86 (Fiscal Note Support Form). The bill that
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
5
3At least three district courts have also confronted the issue. While
the courts are split in their determination, it appears that one of the
guiding factors is the cost of the assessment, and whether the cost is
nominal or exacts a greater amount for general revenue raising purposes.
See Thrope v. Ohio, 19 F. Supp. 2d 816, 823 (S.D. Ohio 1998) (“the
[$5.00] placard surcharge is not a ‘tax’ for purposes of the Tax Injunction
Act, because it is charged only to the applicants for a placard and
designed to cover the regulatory costs of administering the program”);
Lussier v. Florida, Dep’t of Highway Safety & Motor Vehicles, 972 F.
Supp. 1412, 1420-21 (M.D. Fla. 1997) (finding that $13.50 of the $15.00
disabled person parking permit fee was not used to defray administration
expense and was, therefore, a tax within the meaning of the TIA); Rendon
v. Florida, 930 F. Supp. 601, 604-05 (S.D. Fla. 1996) (finding disabled
parking permit fee to be a tax where the $15.00 surcharge was not
assessed for regulatory reason and bore no relationship to cost of
regulatory program).
promote comity and to afford states the broadest
independence, consistent with the federal constitution, in the
administration of their affairs, particularly revenue raising.”
Wright v. McClain, 835 F.2d 143, 144 (6th Cir. 1987).
To date, there are two federal circuit courts that have
addressed the precise issue of whether assessments imposed
for disabled parking placards constitute taxes or fees under
the TIA.3 See Hexom v. Oregon Dep’t of Transp., 177 F.3d
1134 (9th Cir. 1999); Marcus v. Kansas, Dep’t of Revenue,
170 F.3d 1305 (10th Cir. 1999). The Ninth Circuit in Hexom
held that the $4.00 fee was not designed to raise revenue. See
Hexom, 177 F.3d at 1139. Rather, the fee was designed to
pay for the costs of a special program, and thus was not a tax
for purposes of the TIA and did not preclude federal court
jurisdiction. See id. The Tenth Circuit also concluded that
the $5.25 assessment was not a tax because it was “expressly
tied to the administrative costs of a specific regulatory scheme
and, therefore, its essential character [was] regulatory.”
Marcus, 170 F.3d at 1312.

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6 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
4The TIA has also been broadly interpreted to bar suits for
declaratory relief, injunctive relief, as well as monetary relief when there
is an adequate remedy in state court. See California v. Grace Brethren
Church, 457 U.S. 393, 408-10, 102 S. Ct. 2498, 2507-09 (1982); National
Private Truck Council, Inc. v. Oklahoma Tax Comm’n, 515 U.S. 582,
586-88, 115 S. Ct. 2351, 2354-55 (1995).
1. Whether Tennessee’s Assessment is a Fee or a Tax
The issue is whether the State’s $20.50 assessment for
disabled parking placards and $3.00 assessment for renewal
or replacement is a tax or a regulatory fee. If the assessment
is a tax, then the Act applies and operates to bar federal
jurisdiction unless the state fails to provide a plain, speedy
and efficient remedy.4 See Wright, 835 F.2d at 144-45. “It is
elemental . . . that the label given an assessment by state law
is not dispositive of whether the assessment is a ‘tax under
state law.’ Rather, the definition of the term ‘tax’ is a
question of federal law, and the issue here is whether the
assessment is a tax within the meaning of that term as
employed by Congress in the Tax Injunction Act.” Id. at 144
(citations omitted).
The leading decision is San Juan Cellular Telephone Co. v.
Public Service Commission of Puerto Rico, 967 F.2d 683 (1st
Cir. 1992). The court explained that,
[t]he classic “tax” is imposed by a legislature upon many,
or all, citizens. It raises money, contributed to a general
fund, and spent for the benefit of the entire community.
The classic “regulatory fee” is imposed by an agency
upon those subject to its regulation. It may serve
regulatory purposes directly by, for example, deliberately
discouraging particular conduct by making it more
expensive. Or, it may serve such purposes indirectly by,
for example, raising money placed in a special fund to
help defray the agency’s regulation-related expenses.
Id. at 685 (citations omitted).
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
15
________________
DISSENT
________________
KAREN NELSON MOORE, Circuit Judge, dissenting.
The State of Tennessee charges disabled passengers an
assessment for the privilege of obtaining a disabled parking
placard. Unlike the majority, I believe that, regardless of
where the monies are deposited, Tennessee’s assessment
clearly constitutes a regulatory fee rather than a tax. I
therefore conclude that the Tax Injunction Act presents no bar
to federal court jurisdiction, and I respectfully dissent from
the majority’s holding to the contrary.
The majority reasons that Tennessee’s assessment is a tax
because, pursuant to Tennessee’s statutory scheme, the
monies collected from the issuance of disabled parking
placards are deposited into general state funds rather than into
a special fund earmarked for the administration of the placard
program. This heavy reliance on the disposition of the funds
obscures the principal inquiry, which “centers on function,
requiring an analysis of the purpose and ultimate use of the
assessment.” Collins Holding Corp. v. Jasper County, 123
F.3d 797, 800 (4th Cir. 1997). It is true that the assessments
at issue are deposited into a variety of state funds that benefit
the public generally. However, the fact that the assessments
are commingled with other monies in a general fund for
public benefit does not lead inexorably to the conclusion that
the dominant purpose of the statute is revenue raising.
“Rather than a question solely of where the money goes, the
issue is why the money is taken.” Hager v. City of West
Peoria, 84 F.3d 865, 870-71 (7th Cir. 1996); see also Hexom
v. Oregon Dep’t of Transp., 177 F.3d 1134, 1138 (9th Cir.
1999) (“The question, in the long run, is not simply where the
money is deposited at some point; it is what the purpose or
use of the assessment truly is.”).

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14 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
On appeal, Plaintiffs argue that the district court’s
conclusion is at odds with the plain, unambiguous language
of § 9-8-307(a)(2)(A). They contend that their action
unquestionably arises out of the issuance of a permit or
license. Although we agree that the language is ambiguous
and subject to the interpretation adopted by Plaintiffs, we
conclude that the proper interpretation of the statute does not
preclude Plaintiffs from bringing this action before the Claims
Commission.
The jurisdiction of the Claims Commission to entertain
claims against the State must be determined from the
language of Tennessee Code Annotated § 9-8-307 in its
entirety. The primary rule of statutory construction is to
ascertain and give effect to the legislative intent. See First
American Nat’l Bank-Eastern v. Federal Deposit Ins. Corp,
782 F.2d 633, 636 (6th Cir. 1986). In ascertaining this intent,
we look to the general purpose to be accomplished by the
legislation. See id. Section 9-8-307(a)(3) states, “[i]t is the
intent of the general assembly that the jurisdiction of the
claims commission be liberally construed to implement the
remedial purposes of this legislation.” Following the statute’s
mandate, we construe jurisdiction liberally and resolve that
the collection of taxes charged for the disabled parking
placards can be adequately challenged before the Claims
Commission with a subsequent appeal to the Tennessee state
courts. The district court properly determined that it was
without subject matter jurisdiction.
CONCLUSION
The State’s assessment against disabled persons for the
parking placards is a tax for purposes of the Tax Injunction
Act. We conclude that the Plaintiffs had a plain, speedy and
efficient remedy before the Claims Commission. The district
court properly dismissed the action for lack of subject matter
jurisdiction.
AFFIRMED.
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
7
The Sixth Circuit has adopted the First Circuit’s approach
in determining whether an assessment is a “tax,” utilizing the
often cited three-factor test: “(1) the entity that imposes the
assessment; (2) the parties upon whom the assessment is
imposed; and (3) whether the assessment is expended for
general public purposes, or used for the regulation or benefit
of the parties upon whom the assessment is imposed.”
American Landfill, Inc. v. Stark/Tuscaranwas/Wayne Joint
Solid Waste Management Dist., 166 F.3d 835, 837 (6th Cir.
1999) (quoting Bidart Bros. v. California Apple Comm’n, 73
F.3d 925, 931 (9th Cir. 1996)); see San Juan Cellular Tel.
Co., 967 F.2d at 685. Additionally, if “the assessment falls
near the middle of the spectrum between a regulatory fee and
a classic tax, the predominant factor is the revenue’s ultimate
use. When the ultimate use is to provide a general public
benefit, the assessment is likely a tax, while an assessment
that provides a more narrow benefit to the regulated
companies is likely a fee.” American Landfill, Inc., 166 F.3d
at 838 (citations omitted). Fees can serve regulatory purposes
as distinguished from general public purposes in two ways:
either by discouraging particular conduct through the device
of making it more costly, or by generating income ear marked
to cover the cost of the regulation. See San Juan Cellular Tel.
Co., 967 F.2d at 685.
The record demonstrates that the State’s assessment is a tax
rather than a fee. Under the statutory scheme imposed by the
Tennessee legislature, the $20.50 disabled placard assessment
and the $3.00 renewal assessment are apportioned into the
State’s highway fund, the general fund, the police pay
supplement fund, and the trooper safety fund. See Tenn.
Code Ann. §§ 55-4-103, 55-4-111, 55-6-107, 55-21-103.
Specifically, the assessment is allocated as follows:
1. The $20.50 placard fee collected by county clerks
and remitted to the Title and Registration Division
of the Tennessee Department of Safety or remitted
directly to the division by applicants is deposited in

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8 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
the State of Tennessee Treasury and is allocated in
the following manner:
(A) There is $18.75 registration tax provided by
Tenn. Code Ann. §§ 55-21-103(b)(2)(A)(i) and
55-4-111(a)(1). Of this $18.75 the first $1.00 is
paid into the state treasury and credited to the
police pay supplement fund. Of the $17.75
remainder, ninety-eight percent (98%) is
distributed to the general highway fund and two
percent (2%) to the general fund. This
distribution is made pursuant to Tenn. Code
Ann. § 55-6-107, which directs the proceeds of
any tax collected under Title 55, chapter 4 to be
used for the general public benefit in highway
and improvement projects and in retirement of
state debt.
(B) The $0.75 reflectorization fee collected
pursuant to Tenn. Code Ann. § 55-4-103(f)(2)
is sent to the General Fund earmarked for use in
the salary supplement for law enforcement
members of the Department of Safety.
(C) The $1.00 reflectorization fee provided by
Tenn. Code Ann. § 55-4-103(f)(1) is allocated
to the General Fund.
2. The $3.00 fee charged upon renewal of an expired
placard pursuant to Tenn. Code Ann. § 55-21-
103(f)(1) is allocated to the Highway Fund and the
General Fund in the same manner as the $17.75
registration tax.
The State’s assessments are allocated in a manner that make
it clear the ultimate purpose of the assessments is to benefit
the general public of the State of Tennessee. As such, the
assessment must constitute a tax under the TIA. See
American Landfill, Inc., 166 F.3d at 839-40 (“The revenue’s
ultimate use as a benefit shared by the public and not just the
waste disposal facilities dictates that the assessment here is a
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
13
several types of claims that may be brought before the Claims
Commission, while Tennessee Code Annotated § 9-8-
307(a)(2) limits the type of claims that may be brought. The
limiting provision provides:
No item enumerated in this subsection shall be
interpreted to allow any claim against the state on
account of the acts or omissions of persons, partnerships,
corporations or other entities licensed or regulated by
agencies of the state, notwithstanding any negligence
committed by the state in the course of performing
licensing or regulatory activities. No item enumerated in
this subsection shall be interpreted to allow any claims
against the state arising out of or resulting from:
(A) The issuance, denial, suspension or revocation of,
or by the failure or refusal to issue, deny, suspend or
revoke, any permit, license, certificate, approval, order or
similar authorization . . . .
Tenn. Code. Ann. § 9-8-307(a)(2).
The district court agreed with the State’s interpretation of
the statute, and concluded that Plaintiffs had a plain, speedy
and efficient remedy. It ruled that “Defendants [were] correct
that plaintiffs [were] not making a claim on account of the
acts of any such entity,” and “[t]hus, the first sentence of
Tennessee Code Annotated § 9-8-307(a)(2) [did] not preclude
plaintiffs from bringing their claim before the
Commissioner.” Additionally, the district court stated that the
language of § 9-8-307(a)(2)(A), which precludes claims
against the state “arising out of or resulting from . . . [t]he
issuance . . . of . . . any . . . license,” did not preclude
Plaintiffs’ claim because they were not seeking damages
based on the issuance of a license. Rather, Plaintiffs’ claim
was based on the State’s practice of charging disabled
individuals for a parking placard which allegedly violated the
ADA.

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12 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
7The decision of the Claims Commission is appealable to the state
court of Tennessee. See Stewart Title Guar. Co. v. McReynolds, 886
S.W. 2d 233, 237-38 (Tenn. Ct. App. 1994).
purpose was unrelated to the costs associated with the
disabled placard program; and finally, the assessment was a
tax within the meaning of the TIA.
2. Whether Plaintiffs Have a Plain, Speedy and
Efficient Remedy Under State Law
Although the assertion of federal jurisdiction may interfere
with state tax assessment and collection, such jurisdiction will
nonetheless exist if the state fails to provide a “plain, speedy
and efficient remedy” in state courts. 28 U.S.C. § 1341. The
plain, speedy and efficient remedy contemplated by the TIA
merely requires that the state provide certain minimal
procedural protections against illegal tax collection. See
Rosewell v. LaSalle Nat’l Bank, 450 U.S. 503, 512, 101 S. Ct.
1221, 1229 (1981). The state need only provide a full hearing
at which a taxpayer may present and secure a judicial
determination at which he or she may raise any and all
constitutional objections to the tax. See id. Furthermore, we
have concluded that “[s]tate procedures that call for an appeal
to a state court from an administrative decision meet these
minimal criteria.” Northwest Airlines, Inc. v. Tennessee State
Bd. of Equalization, 11 F.3d 70, 72 (6th Cir. 1993).
Whether the State of Tennessee provides a “plain, speedy
and efficient remedy” in state courts depends on the
interpretation of the Tennessee statute which both allows and
limits monetary claims brought before the Claims
Commission. See Tenn. Code Ann. § 9-8-307. This statute
provides that the Tennessee Claims Commission has
exclusive jurisdiction over a claim “for the recovery of taxes
collected or administered by the state.”7 Tenn. Code Ann.
§ 9-8-307(a)(1)(O). Tennessee, however, has not declared
itself subject to suit in all actions to recover taxes. Rather,
Tennessee Code Annotated § 9-8-307(a)(1) sets out a list of
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
9
tax.”). The State’s highway fund, the general fund, the police
pay supplement fund, and the trooper safety fund “relate
directly to the general welfare of the citizens of Tennessee
and the assessments to fund them are no less general revenue
raising levies simply because they are dedicated to a particular
aspect of the commonwealth.” Wright, 835 F.2d at 145.
There is simply no evidence to support Plaintiffs’
contention that the funds collected from the placards are paid
into a special fund to benefit the regulated entities or to defray
the cost of regulation. Plaintiffs, however, have submitted a
1994 “Fiscal Note Support Form” to infer the legitimacy of
their contention. This document provides that the fiscal
impact of a proposed amendment to the Disabled Drivers Law
changing the term “handicapped” to “disabled” pursuant to
the ADA and charging a renewal fee of $5.00 per placard
every two years would be $204,000 bi-annually with an
estimated revenue of $500,000. The Disabled Drivers Law
was ultimately amended to provide for a renewal fee of $3.00
bi-annually. See Tenn. Code Ann. § 55-21-103(f)(1). The
argument, asserted by Plaintiffs and adopted by the dissent,
that the revenue generated by a $3.00 bi-annual assessment
($300,000) supports a relationship between the assessment
and the cost of the renewal program ($204,000), is
speculation. See infra pp. 16-17. We do not know the
reasons why the legislature decided to reduce the $5.00
amount to the $3.00 amount; what we do know is that the
renewal amount charged is ultimately used to support the
highway fund and the general fund. See supra p. 8.
Plaintiffs’ further contention that the revenues generated by
these assessments do not affect the State’s budget in “any
material way” also finds no support in the record. As we
recently explained, the TIA “makes no exception for
challenges to taxes which constitute a small portion of a
state’s revenue sources rather than a large portion.” American
Landfill, Inc., 166 F.3d at 840.

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10 Hedgepeth, et al. v. State
of Tennessee, et al.
No. 99-5166
5Tennessee derives the $20.50 for the disabled parking placard and
vehicle registration from the amount charged for the registration of all
Class C passenger motor vehicles. See Tenn. Code. Ann. § 55-21-
103(b)(2)(A)(i) (“If the applicant has not applied for vehicle registration,
then the cost of the placard shall be the same as the regular fee for
passenger motor vehicles, as provided in § 55-4-111.”). The dissent
reasons that the original enactment of the Disabled Drivers Law of 1975,
which provided that the actual cost of the placard be paid by the disabled
driver, tied the amount assessed to the costs of the program, and thus
suggests that the purpose of the assessment was regulatory. See infra
p. 16. This reasoning, however, does not overcome the insurmountable
fact that the current version of Tennessee Code Annotated § 55-21-
103(b)(2)(A)(i) requires disabled persons who receive disabled parking
placards upon registration to pay the same approximate amount required
of non-disabled persons to register their vehicle. Further, the collected
monies from the disabled persons are distributed in the same way as non-
disabled persons. See Tenn. Code Ann. §§ 55-4-111(a)(2), 55-6-107(a).
Disabled persons are merely being taxed in the same way that non-
disabled persons are being taxed.
The only evidence in the record regarding any costs
associated with the State’s disabled parking program is the
actual cost of the disabled parking placard. The Director of
the State of Tennessee Department of Safety, Title and
Registration Division testified that the cost of the permanent
placard was 45.4 cents ($0.454) and the disabled license plate
was $1.32. While we do not dispute that there must be other
administrative costs associated with the program, we do not
know the source or the amount of those administrative costs.
Plaintiffs have simply failed to demonstrate that the $20.50 is
some approximation of the costs associated with the
program.5 See Thrope, 19 F. Supp. 2d at 823. The
substantial difference between the actual cost of the
permanent placard or license plate and the amount that must
be paid to obtain one supports a conclusion that the
assessment is for general revenue raising purposes. See id.
Plaintiffs contend on appeal that “the State’s targeting of a
narrow class is expressly prohibited by Congress in the ADA,
and it overlooks the fact that the charge is in the nature of a
privilege fee in that the charge for the parking placard is for
No. 99-5166 Hedgepeth, et al. v. State
of Tennessee, et al.
11
6The dissent would rather focus the inquiry on “why the money is
taken” instead of “where the money goes.” Infra p. 15. Although such
inquiry is entirely appropriate, the answer inexorably leads us to the
evidence in the record which shows us that the money is taken to benefit
the general welfare, and not to defray the specific costs of the disabled
parking placard program.
the privilege of parking in handicapped parking spaces.”
This contention, however, fails to address the district court’s
conclusion that the instant circumstance is inapposite to that
of Collins Holding Corp. v. Jasper County, 123 F.3d 797, 800
(4th Cir. 1997) (stating the proposition that when “the
assessment covers only a narrow class of persons and is paid
into a special fund to benefit regulated entities or defray the
cost of regulation, it sounds like a fee.”). Plaintiffs have
successfully shown that only a narrow class of persons is
charged with the assessment, but they plainly fail to present
any facts to show that the assessments are “paid into a special
fund to benefit regulated entities or defray the cost of
regulation.”6 Id.
Using the three-factor inquiry outlined in San Juan Cellular
Telephone Co. and adopted by this circuit leads to the same
conclusion. Both the first and third factors weigh heavily in
favor of the State. Not only did the State of Tennessee
authorize and legislate that the assessments be charged against
disabled persons, but they also provided the manner in which
they were to be allocated to benefit the general public.
Although the second factor, the parties upon whom the
assessment is imposed, weighs in favor of the Plaintiffs, the
district court properly determined that “[s]tanding alone, the
fact that an assessment targets only a narrow class of people
is not enough to characterize the assessment as a fee. See
Wright, 835 F.2d at 144-45 (holding that fees charged to
parolees were taxes for purposes of the TIA).”
Based on the evidence in the record, the district court
properly concluded that the ultimate purpose of the State’s
assessment was for general revenue raising purposes; such

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