Informal Opinion No. ( 1986 )

Samuel Ungar, Esq. Deputy Corporation Counsel, Long Beach

You have requested our opinion concerning the amount the city may charge for granting of taxicab medallions. According to your letter, the administrative cost to the city of issuing a medallion is $55. The market value, however, of a medallion ranges from $7,000 to $10,000. Specifically your question is whether the city must limit its charges to its costs or may charge the market value.

Many local governments regulate taxicabs utilizing their police powers in furtherance of the health, safety and general welfare of persons in the municipality. A local government, as part of such a regulatory program, may impose fees to pay the expense of the regulations (City of Buffalo vStevenson, 207 N.Y. 258 [1913]). The amount of the fees charged, however, should approximate what is reasonably necessary to undertake the regulatory program (Jewish Recon. Etc. v Inc. Village of Roslyn Harbor,40 N.Y.2d 158, 163 [1976]). If the fees charged far exceed the cost of regulation, they may instead constitute a tax (City of Buffalo vStevenson, supra; Op Atty Gen No. 85-26). Local governments may not tax without a specific delegation of taxing power by the State Legislature (NY Const, Art XVI, § 1).

It follows that absent specific legislation, the city is without power to authorize a charge of $7,000 to $10,000 for a taxicab medallion, because this amount is not reasonably related to the cost of the regulatory program.

You have also requested our advice concerning the procedure for issuance of medallions. This is a legislative decision that must be made by the local legislative body based upon local conditions. We will be happy, however, to answer any specific questions you may have in this area.

We conclude that a charge for taxicab medallions far exceeding the cost of the regulatory program is a tax rather than a fee and must be specifically authorized by the State Legislature.