                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit


                           No. 97-60285


  HOME BUILDERS ASSOCIATION OF MISSISSIPPI, INC.; MARK S.JORDAN;
    GOOD EARTH DEVELOPMENT, INC.; MARK S. JORDAN, INC.; HIGHLAND
    RIDGE PARTNERS, LP; SMCDC, INC.; POST OAK PLACE; LOCUST LANE
 PARTNERS, L.P.; WILLIAM J. SHANKS; WJS & ASSOCIATES, INC.; SOUTH
MADISON COUNTY DEVELOPMENT COMPANY; THOMAS M. HARKINS, SR; THOMAS
     M. HARKINS, JR.; NORTH PLACE DEVELOPMENT, INC.; NORTH RIDGE
    DEVELOPMENT,INC.; FIRST MARK HOMES, INC.; THOMAS M. HARKINS,
 Builder, Inc.; THV, INC.; J.F.P. & CO., INC.; J. PARKER SARTAIN;
  BRIAN H.SARTAIN; HABITAT, INC.; J.P.S. BUILDING SUPPLIES, INC.;
        SARTAIN ASSOCIATES, INC.; DOUGLAS PLACE PARTNERSHIPS,

                                    Plaintiffs-Appellants,

                               VERSUS

  CITY OF MADISON, MISSISSIPPI; MARY HAWKINS, Individually and in
  her official capacity as Mayor of Madison, Mississippi; TIMOTHY
L. JOHNSON, Individually and in his official capacity as Alderman
 and elected public official of the City of Madison, Mississippi;
 LISA CLINGAN-SMITH, Individually and in her official capacity as
    Alderman and elected public official of the city of Madison,
  Mississippi; TOMMY E. BUTLER, Individually and in his official
  capacity as Alderman and elected public official of the City of
  Madison, Mississippi; CHARLES L. DUNN, Individually and in his
 official capacity as Alderman and elected public official of the
City of Madison, Mississippi; GRIFFEN C. WEAVER, Individually and
 in his official capacity as Alderman and elected public official
                of the City of Madison, Mississippi.,

                                    Defendants-Appellees.


          Appeals from the United States District Court
             for the Southern District of Mississippi

                           July 1, 1998

Before WISDOM, JOLLY, and HIGGINBOTHAM, Circuit Judges.

WISDOM, Circuit Judge:


                         I.   Introduction
     The sole question before us is whether the Tax Injunction Act

of 1937 bars a federal district court from exercising jurisdiction

over a plaintiff’s complaint that a municipal impact fee ordinance

violates the Fifth and Fourteenth Amendments to the United States

Constitution.   The district court held that it does, and therefore

dismissed the complaint for want of subject matter jurisdiction.

We affirm.

                          II. Background

     In 1986, the city of Madison, Mississippi, adopted an impact

fee ordinance that required developers and builders in new

residential areas to pay a $700 impact fee for each planned

residential dwelling unit as a necessary condition to obtaining a

building permit.   Madison passed the ordinance to alleviate the

problems attendant to providing and maintaining essential

municipal services and facilities in the rapidly-growing city.

Under the terms of the ordinance, collected funds were to be

appropriated in a manner consistent with a contemporaneously-

adopted public improvement plan that was designed to guide the

future development of public facilities.1

     In 1995, Home Builders Association of Mississippi (“Home

Builders”) and an assortment of others filed a suit under 42

U.S.C. § 1983 against the City of Madison in which they sought


     1
       From 1986 to 1994, however, Madison allegedly violated the
ordinance by applying the funds towards capital improvements that
were not delineated in the public improvement plan.

                                 2
(1) a declaration that the impact fee ordinance was

unconstitutional, (2) an injunction prohibiting the assessment,

collection and expenditure of impact fees, and (3) a refund of

all impact fees collected in advance of the litigation.2        Home

Builders’s complaint specifically alleged that “the assessment,

collection and expenditure of any and all impact fees by Madison

... represents and constitutes nothing more than an improper,

unlawful and unconstitutional form of taxation or general tax.”

     Madison moved to dismiss the case under Rule 12(b)(1) of the

Federal Rules of Civil Procedure on the ground that the Tax

Injunction Act removed it from the scope of the district court’s

subject matter jurisdiction.      The district court denied the

motion but stated that it “may reconsider [the matter] at a later

date.”       Following additional discovery and oral arguments on the

constitutionality of the impact fee ordinance, the district court

dismissed Home Builders’s complaint for want of subject matter

jurisdiction.      It held that the 1986 impact fee ordinance

constituted a “tax” for purposes of the Tax Injunction Act, and

that the plaintiffs would be forced to seek relief in Mississippi

state court, which could provide them with a plain, speedy, and

efficient remedy.      Home Builders timely appealed from this final


         2
        In 1996, Madison repealed the impact fee ordinance and
replaced it with a traffic impact fee ordinance to which Home
Builders does not object.    At this juncture in the litigation,
therefore, Home Builders merely seeks a refund of the impact fees
collected under the 1986 ordinance.

                                     3
judgment.

                           III. Standard of Review

     We review de novo the district court’s grant of Madison’s

12(b)(1) motion to dismiss for want of subject matter

jurisdiction.3       A motion under 12(b)(1) should be granted only if

it appears certain that the plaintiff cannot prove any set of

facts in support of his claim that would entitle him to relief.4

“A case is properly dismissed for lack of subject matter

jurisdiction when the court lacks the statutory or constitutional

power to adjudicate the case.”5

                               IV. Discussion

     The Tax Injunction Act provides:

     The district courts shall not enjoin, suspend or restrain
     the assessment, levy or collection or any tax under State
     law where a plain, speedy, and efficient remedy may be had
     in the courts of such State.6

The act imposes drastic limitations on the federal judiciary’s


    3
      Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 171 (5th Cir.
1994).
     4
             Benton v. United States, 960 F.2d 19, 21 (5th Cir. 1992).
         5
        Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182,
1187 (2d Cir. 1996).
         6
        28 U.S.C. § 1341.    It is well-settled that the statute
applies not only to taxes imposed by states, but also to those
imposed by municipalities. Alnoa G. Corp. v. City of Houston, 563
F.2d 769 (5th Cir. 1977); Folio v. City of Clarksburg, 134 F.3d
1211, 1214 (4th Cir. 1998). It is equally well-settled that the
statute applies to actions like the one before us, in which the
plaintiff seeks a refund of taxes it has already paid. Pendleton
v. Heard, 824 F.2d 448, 451 (5th Cir. 1987).

                                      4
ability to meddle with a local concern as important and sensitive

as the collection of taxes.7       Embodied within the statute is “the

duty of federal courts to withhold relief when a state

legislature has provided an adequate scheme whereby a taxpayer

may maintain a suit to challenge a state tax.”8       In short, the

Tax Injunction Act is a “broad jurisdictional impediment to

federal court interference with the administration of state tax

systems.”9

     We employ a bifurcated analysis to determine whether the Tax

Injunction Act bars federal jurisdiction in a given case.       First,

because the act is implicated exclusively by matters of state and

local taxation, we must decide whether the law in question

imposes a tax or merely a regulatory fee.10      Only if the law

imposes a tax does the act preclude a federal district court from

exercising jurisdiction.       Second, even if the law imposes a tax


    7
      Rosewell v. LaSalle National Bank, 450 U.S. 503, 522 (1981).
See also Alnoa G. Corp. at 772.
     8
            Bland v. McHann, 463 F.2d 21, 24 (5th Cir. 1972).
        9
       United Gas and Pipe Line Co. v. Whitman, 595 F.2d 323, 326
(5th Cir. 1979). See also Fair Assessment in Real Estate Ass’n v.
McNary, 454 U.S. 100, 116 (1981) (“taxpayers are barred by the
principles of comity from asserting § 1983 actions against the
validity of state tax systems in federal court”).
    10
       What constitutes a “tax” for purposes of the Tax Injunction
Act is a question of federal law. Ben Oehrleins, Inc. v. Hennepin
County, 115 F.3d 1372, 1382 (8th Cir. 1997). The label affixed to
an ordinance by its drafters has no bearing on the resolution of
the question.    See Robinson Protective Alarm Co. v. City of
Philadelphia, 581 F.2d 371, 374 (3d Cir. 1978).

                                     5
for purposes of the Tax Injunction Act, a district court may

decline to exercise jurisdiction only if the state court is

equipped to furnish the plaintiffs with a plain, speedy, and

efficient remedy.11       That is, the act does not divest district

courts of jurisdiction if state court remedies are inadequate.

                                A. Tax v. Fee

        Our initial inquiry, then, is whether Madison’s impact fee

ordinance qualifies as a tax for purposes of the Tax Injunction

Act.        Home Builders, of course, urges that the ordinance imposes

a fee, in which event the act would not operate as a

jurisdictional bar.        For its part, Madison contends that the

ordinance fits squarely within the meaning of a tax as

contemplated by the act.        For the reasons that follow, we hold

that Madison’s impact fee ordinance qualifies as a tax rather

than a fee for purposes of the Tax Injunction Act.12

        Distinguishing a tax from a fee often is a difficult task.

Indeed, “the line between a ‘tax’ and a ‘fee’ can be a blurry

one.”13       Workable distinctions emerge from the relevant case law,

however:        the classic tax sustains the essential flow of revenue


       11
       Cumberland Farms, Inc. v. Tax Assessor, State of Maine, 116
F.3d 943, 945 (1st Cir. 1997); Collins Holding Corp. v. Jasper
County, South Carolina, 123 F.3d 797, 799 (4th Cir. 1997).
       12
      We need not and do not express any opinion as to whether the
ordinance constitutes a tax for purposes of other statutes or other
litigation.
        13
             Collins Holding Corp., 123 F.3d at 800.

                                      6
to the government, while the classic fee is linked to some

regulatory scheme.14        The classic tax is imposed by a state or

municipal legislature, while the classic fee is imposed by an

agency upon those it regulates.15         The classic tax is designed to

provide a benefit for the entire community, while the classic fee

is designed to raise money to help defray an agency’s regulatory

expenses.16

     In Mississippi Power & Light Co. v. United States Nuclear

Regulatory Commission,17 we considered whether a Nuclear

Regulatory Commission rule that mandated the payment of a charge

as a precondition to obtaining a license to operate a nuclear

facility qualified as a permissible fee or as an unconstitutional

tax.18     The rule was “designed to recover the costs for

processing applications, permits and licenses as well as the

costs arising from health and safety inspections and statutorily



     14
       See Folio v. City of Clarksburg, 134 F.3d 1211, 1217 (4th
Cir. 1998); Hager v. City of West Peoria, 84 F.3d 865, 871 (7th
Cir. 1996); San Juan Cellular Telephone Co. v. Public Service
Commission of Puerto Rico, 967 F.2d 683, 685 (1st Cir. 1992);
Mississippi Power & Light Co. v. United States Nuclear Regulatory
Commission, 601 F.2d 223, 227-29 (5th Cir. 1979).
     15
           San Juan Cellular Telephone Co. at 685.
     16
           Id.
     17
           supra note 14.
          18
         We did not decide this case in the context of the Tax
Injunction Act. Nevertheless, we find its reasoning helpful to the
disposition of the case at bar.

                                      7
mandated environmental and antitrust reviews.”19    We held that

the rule imposed a fee rather than a tax because (1) it was

designed to defray the NRC’s operating costs, and (2) it did not

generate revenues that were intended to provide a benefit for the

general public.20    That holding is consonant with the cases we

cited above that define the paradigmatic fee as one imposed by an

agency upon those it regulates for the purpose of defraying

regulatory costs.21

     In Tramel v. Schrader,22 we considered whether a special

street improvements assessment imposed exclusively upon select

businesses was a tax or a regulatory fee.    Even though the

assessment was not levied against the community at large, we

concluded that the assessment constituted a tax for purposes of

the Tax Injunction Act.23    We reasoned that a broad construction

of “tax” was necessary to honor Congress’s goals in promulgating

the Tax Injunction Act, including that of preventing federally-

based delays in the collection of public revenues by state and


     19
          Mississippi Power & Light Co. at 225.
     20
          Id. at 228-30.
          21
         See also Union Pacific Railroad Co. v. Public       Utility
Commission, 899 F.2d 854, 856 (9th Cir. 1990) (Public        Utility
Commission assessment qualified as a fee rather than a tax   because
it helped defray the cost of performing the regulatory        duties
imposed on the Commission).
     22
          505 F.2d 1310 (5th Cir. 1975).
     23
          Id. at 1315-16.

                                  8
local governments.24

     With these principles and precedents in mind, we turn to the

question of whether Madison’s impact fee ordinance imposes a fee,

in which case the Tax Injunction Act would not be implicated, or

a tax, in which case the act would divest the district court of

subject matter jurisdiction.    As a preliminary matter, it must be

noted that we are far more concerned with the purposes underlying

the ordinance than with the actual expenditure of the funds

collected under it.25    That is, we look principally to the

language of the ordinance and the circumstances surrounding its

passage.    In doing so, it becomes clear that Madison’s impact fee

ordinance imposes a tax for purposes of the Tax Injunction Act.

The preamble to the ordinance states that its purpose was:

     to alleviate problems attendant to the City of Madison
     providing and maintaining the quality of essential municipal
     services and facilities to its present and future residents
     and to require the developers of and builders in new
     residential areas within the City to pay a fair share of
     providing and maintaining the essential municipal services
     and facilities outlined in the PIP.

The ordinance further states that:

     funds collected .... shall be used for street improvements,
     fire department improvements, police department
     improvements, and parks and recreation improvements as
     outlined in the PIP .... This Ordinance shall be used for
     the purposes of implementing and funding the PIP and to
     otherwise further the protection and promotion of the public
     health, safety and welfare of the City of Madison and its

     24
          Id. at 1316.
     25
       See Hager,84 F.3d at 870-71 (rather than a question solely
of where the money goes, the issue is why the money is taken).

                                  9
     citizens and to regulate the adverse effects of rapid
     residential development by insuring adequate public
     facilities and services to present and future residents of
     the City.

Indeed, it is difficult to imagine that an ordinance designed to

protect and promote the public health, safety and welfare of an

entire community could be characterized as anything but a tax.

Furthermore, Madison’s impact fee ordinance does not bear any

resemblance to other ordinances and statutes that we and other

circuits have construed to impose fees.

     Home Builders argues that the impact fee ordinance is

regulatory in nature because it narrowly defines the purposes for

which collected funds should be spent.    We implicitly rejected

this argument in Tramel,26 and we decline to reconsider it now.

Home Builders also argues that Madison cannot identify how much

of the impact fees collected under the ordinance were, in fact,

expended on the public improvements outlined in the PIP.    That

may be so.    Nevertheless, it is an argument that goes to the

merits of the case, and as such, we will not consider it if the

Mississippi courts are equipped to provide Home Builders with an

adequate state remedy.

                           B. State Remedies

     State courts are equipped to furnish a plain, speedy, and

efficient remedy if they provide a procedural vehicle that



     26
          supra note 22.

                                  10
affords taxpayers the opportunity to raise their federal

constitutional claims.27       That is, a state’s remedy is adequate

when it provides taxpayers with a complete judicial determination

that is ultimately reviewable in the United States Supreme

Court.28       Importantly, though, “the state remedy need not be the

best of all remedies. [It] need only be adequate.”29

        We conclude that Mississippi provides its citizens with a

plain, speedy, and efficient remedy for challenging a municipal

tax.        Mississippi Code Annotated § 11-13-11 provides:

        The Chancery Court shall have jurisdiction of suits by one
        or more taxpayers in any county, city, town, or village, to
        restrain the collection of any taxes levied or attempted to
        be collected without authority of law.

Home Builders argues that the statute does not provide an

adequate remedy in this case because it does not apply to actions

in which taxpayers are seeking a tax refund.        This argument is

without merit.        In Bland v. McHann,30 we held that Mississippi

Code Title 10 § 1340, a precursor to § 11-13-11, provided a

plain, speedy, and efficient remedy to plaintiffs who sought a

refund of taxes levied improperly by a municipality.          We see no

reason why § 11-13-11 does not create an adequate remedy at law


       27
      Smith v. Travis County Education District, 968 F.2d 453, 456
(5th Cir. 1992).
        28
             Id.
        29
             Alnoa G. Corp., 563 F.2d at 772.
        30
             supra note 8.

                                     11
for these plaintiffs.31    Should Home Builders fail to persuade

the Chancery Court that Madison’s impact fee ordinance is

unconstitutional, it may appeal to the Mississippi Supreme Court,

and seek ultimate review in the United States Supreme Court.32

     For the foregoing reasons, we affirm the judgment of the

district court.    In doing so, however, we note that principles of

claim preclusion do not bar the plaintiffs from pursuing their

claims in state court.    A dismissal under Rule 12(b)(1) is not on

the merits, and therefore cannot have a res judicata effect.33

     AFFIRMED.




     31
       At oral argument, Madison conceded that Mississippi courts
are capable of furnishing an adequate remedy for Home Builders.
    32
       Federal jurisdiction over § 1983 actions is concurrent, not
exclusive. State actions may be brought under § 1983. Southern
Jam, Inc. v. Robinson, 675 F.2d 94, 98 (5th Cir. 1982).         The
Mississippi Supreme Court has stated that its courts “are not free
to refuse adjudication of claims brought under the Constitution and
laws of the United States.” Burrell v. Mississippi State Tax
Commission, 536 So.2d 848, 863 (Miss. 1988).
     33
          Nowak, 81 F.3d at 1188.

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