Ap­peals court up­holds cig­a­rette tax

Smaller com­pa­nies called 55-cent levy un­con­sti­tu­tional.

Austin American-Statesman - - COMMUNITY NEWS - By Chuck Lin­dell clin­dell@states­man.com

Dis­miss­ing a law­suit filed by small tobacco com­pa­nies, an Austin-based ap­peals court ruled Fri­day that state reg­u­la­tors could im­pose a spe­cial tax on cig­a­rette mak­ers that weren’t part of a multi­bil­lion-dol­lar set­tle­ment reached with Big Tobacco in the late 1990s.

The rul­ing by the 3rd Court of Ap­peals up­held a 2013 state law that placed a 55-cent-per-pack fee on cig­a­rettes not man­u­fac­tured by the large com­pa­nies that set­tled law­suits filed by Texas and other states over al­le­ga­tions of de­cep­tive ad­ver­tis­ing and mar­ket­ing to chil­dren.

Un­der the set­tle­ment, the six Big Tobacco com­pa­nies pay Texas about $500 mil­lion per year, and law­mak­ers levied the tax to re­cover smok­ing-re­lated health care costs from other man­u­fac­tur­ers. The fee also was in­tended to re­move a mar­ket­ing ad­van­tage that al­lowed smaller tobacco com­pa­nies to sell cheaper prod­ucts, an added en­tice­ment for un­der­age smok­ers, law­mak­ers said at the time.

Fri­day’s rul­ing was the sec­ond sig­nif­i­cant le­gal vic­tory for state of­fi­cials de­fend­ing the tax.

Last year, the Texas Supreme Court re­jected ar­gu­ments that the tax was im­proper be­cause it treated the same prod­ucts dif­fer­ently based on the man­u­fac­turer. In­stead, the court ruled, the law was a rea­son­able at­tempt to hold smaller com­pa­nies ac­count­able for sell­ing prod­ucts that have the same health costs as Big Tobacco’s prod­ucts.

The Supreme Court re­turned the case to the 3rd Court of Ap­peals to weigh ad­di­tional ob­jec­tions raised by the small tobacco com­pa­nies.

Writ­ing for the 3rd Court’s three-judge panel, Jus­tice David Puryear re­jected ar­gu­ments that the tax vi­o­lated the U.S. Con­sti­tu­tion’s due process and equal treat­ment stan­dards and or­dered the law­suit to be dis­missed.

The rul­ing can be ap­pealed to the state Supreme Court. at­tor­ney gen­eral’s of­fice, as Hutto’s as­sis­tant po­lice chief, it said.

Hutto po­lice Lt. Nathan Sprag­gins will be the act­ing chief un­til Fran­k­land be­gins, the re­lease said. City spokes­woman Jill Cloud said she didn’t know when Fran­k­land would be­gin his new job.

In a phone in­ter­view Fri­day, Fran­k­land said the Hutto po­lice chief job had been “ad­ver­tised” and he had in­ter­viewed for it this month.

Mor­ri­son, who was chief for two years, couldn’t be reached for com­ment Fri­day.

Jones wouldn’t com­ment Fri­day when asked about ap­point­ing a new chief the same day Mor­ri­son re­signed. He also de­clined to an­swer other ques­tions about the shakeup at the de­part­ment, say­ing in an email, “Please re­fer any and all fu­ture ques­tions to Jill Cloud.”

Cloud said the city doesn’t dis­cuss “per­son­nel mat­ters.”

Mor­ri­son was paid about $105,000 a year, Cloud said, and Fran­k­land will be paid about $130,000, “which re­flects his ex­ten­sive ex­pe­ri­ence and qual­i­fi­ca­tions.”

Fran­k­land said he wanted to come to Hutto be­cause it has a grow­ing po­lice de­part­ment and he is look­ing for­ward to the chal­lenge. He said he has “pos­i­tive skills” af­ter 24 years in the Galve­ston Po­lice De­part­ment and over­see­ing large events, in­clud­ing mo­tor­cy­cle ral­lies and Mardi Gras pa­rades.

Three Hutto City Coun­cil mem­bers — Anne Cano, Lu­cio Valdez and Nate Kil­lough — de­clined to com­ment Fri­day about Mor­ri­son’s res­ig­na­tion. Two other coun­cil mem­bers didn’t re­spond to re­quests for com­ment or couldn’t be reached.

For­mer City Coun­cil Mem­ber Ron­nie Quin­tanilla-Perez de­scribed Mor­ri­son as a “pro­fes­sional and a man of in­tegrity.”

“He al­ways worked hard to im­prove and move the de­part­ment for­ward,” she said. “I am sorry that the de­part­ment and the com­mu­nity will be los­ing him.”

Mor­ri­son’s is the lat­est in a se­ries of re­cent res­ig­na­tions and fir­ings in Hutto.

Two City Coun­cil mem­bers, Michael Smith and Bet­tina Jor­dan, re­signed this month. Smith stepped down af­ter ques­tions were raised about un­paid taxes; Jor­dan didn’t re­spond to a re­quest for com­ment about her res­ig­na­tion March 16.

Last week, the city held a news con­fer­ence to an­nounce that Jones had fired the city’s hu­man re­sources di­rec­tor, an as­sis­tant city man­ager and a se­nior plan­ner, say­ing it was be­cause they lacked the skills for their jobs.

Their at­tor­ney said two of them were fired partly in re­tal­i­a­tion for re­port­ing a com­plaint of sex­ual ha­rass­ment and dis­crim­i­na­tion against Jones to the city’s mayor.

The City Coun­cil and an at­tor­ney for the city said Jones had done noth­ing wrong.

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