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Are you nostalgic for some strip club litigation?

Then this is your lucky day.

The legal fight over the striptease business in Houston has heated up, again.

Two topless bars are suing the city of Houston over a controversial, years-old legal settlement they say unfairly hampers business at all but a select group of clubs.

In a June 1 filing, lawyers for Chicas Cabaret and Penthouse Houston argued that the 2013 settlement — which allowed sixteen strip clubs to skirt the city’s sexually-oriented business ordinance by making annual payments to fund an anti-human trafficking unit in the Houston Police Department — amounts to a commercial bribery scheme.

The two north Houston clubs argue the settlement is “unlawful, unfair, and anti-competitive in nature,” and impacted their ability to do business.

“Our position is that discriminating against some clubs and showing favoritism towards others is just plain wrong under the Constitution and Texas law,” said Spencer Markle, attorney for Chicas Cabaret and Penthouse Houston. “That’s why we’re taking them to task.”

The strip clubs are seeking a restraining order that would either prevent city officials from allowing the “sweet 16” clubs to avoided the city’s sexually-oriented business ordinance, or allow Chicas and Penthouse to join the agreement under the same terms.

“We just don’t want to be at a business disadvantage compared to the other clubs that are similarly situated,” Markle said.

[…]

Legal experts said the city’s recent settlement with Fantasy Plaza and the new lawsuits raised renewed questions about the city’s sexually-oriented business ordinance and the way it regulates sexually oriented businesses.

“Why is the city keeping an the ordinance on the books and basically exempting (businesses) from it?” said Josh Blackman, a professor at the South Texas College of Law Houston. “Normally the point of a statute is to enforce it equally. And if they’re just cutting deals with every strip club that asks for it, just repeal the damn statute.”

Markle’s suit echoes the same argument made by lawyers for Fantasy Plaza Cabaret when they sued the city of Houston earlier this year.

See here, here, and here for the background on the 2013 litigation. I thought that settlement was reasonable enough, but I can’t think of a good rebuttal to the argument that if this deal is available to some clubs, it should be available to all of them. I look forward to seeing how this gets resolved.

Supreme Court re-upholds strip club tax

Technically, they declined to re-review it, but practically speaking I figure it’ll amount to the same thing.

The Texas Supreme Court on Friday declined to review whether a $5-per-patron fee at live nude entertainment clubs is an occupation tax in disguise, letting stand a lower appeals court ruling that found alcohol-serving Texas strip clubs must pay up when it comes to the “pole tax.”

Last May, the Texas Third Court of Appeals ruled that the fee was not an unconstitutional occupation tax and must be paid by Texas strip clubs that serve alcohol.

[…]

It is not clear whether the clubs will continue their legal fight. A call seeking comment from a lawyer for the Texas Entertainment Association, which represents many of the roughly 200 strip clubs in the state, was not immediately returned.

See here and here for the background. The clubs have now lost twice in court. Hard for me to see what the value proposition is for them to give it a third try rather than just collecting and paying the fee at this point, but that’s up to them. I have a feeling there will be another chapter in this story eventually.

It was a bad week for the strip clubs

Another adverse court ruling.

A state appeals court on Friday upheld the legality of the state’s so-called “pole tax” on nude entertainment clubs, the latest decision in a six-year battle by Texas officials to collect the $5-per-customer fee from more than 200 strip clubs.

In a 16-page decision, the 3rd Court of Appeals overruled a challenge by the Texas Entertainment Association contending the law violated the Texas Constitution because it is an occupation tax from which 25 percent of the collections must go to public schools. The appeals court ruled that it is an excise tax that could be spent however the Legislature wishes.

[…]

In its decision, written by Justice Scott Field, the appeals court rejected the clubs’ argument that the fee was an occupation tax and, as such, was unconstitutional because it did not allocate a quarter of the revenue collected to public schools as mandated in the Texas Constitution.

The court also dismissed arguments that the tax violated the state Constitution’s “equal and uniform” requirement by covering only nude-entertainment business where there is an audience of two or more, and not other adult businesses, such as lingerie modeling studios or adult movie arcades that cater to single customers.

“We conclude that the sexually oriented business tax’s classification is not unreasonable because limiting the tax’s applicability to businesses with audiences of two or more reasonably relates to adverse secondary effects that the tax is intended to address,” the ruling states. “Given that the (Texas) supreme court has already concluded that the sexually oriented business tax does not violate the First Amendment of the United States Constitution, we likewise conclude that it does not violate the free speech clause of the Texas Constitution.”

The decision notes that the Texas Supreme Court upheld the fee because it “was imposed to address the adverse secondary effects of combining nude entertainment with alcohol consumption, both by discouraging the activity through higher taxation and by generating revenue for programs designed to address the social harms that result.”

Businesses offering adult entertainment to one customer at a time do not have the same adverse effects, it states.

First the Comptroller’s demand for payment, now this. The original suit was filed on First Amendment grounds but lost at the Supreme Court. This was a different tack, but so far not any more successful. I’m sure this will be appealed to the Supreme Court, so maybe by 2016 we’ll have a final resolution, assuming the clubs don’t have some other argument in their back pocket in the event this one fails. The Trib has more.

Combs tells strip clubs to pay up

Interesting.

Susan Combs

Texas Comptroller Susan Combs is pressing the state’s strip clubs to cough up millions of dollars she says they owe under a new “pole tax” even though the $5-a-patron fee still faces a court challenge.

“Any claim that ongoing litigation is a basis for nonpayment of the Sexually Oriented Business Fee is not valid,” insists an April 11 letter from the comptroller’s tax division that was sent to roughly 200 clubs in Texas that offer nude entertainment.

The fee, which strip club attorneys have claimed is an unfair tax, has been the subject of legal fights virtually since it was passed in 2007 as a way to fund programs for sexual assault victims and health care. The strip clubs’ lobby organization, the Texas Entertainment Association, filed a lawsuit challenging the constitutionality of the fee, arguing that erotic dancing is a form of expression protected by the First Amendment. But in 2011, the Texas Supreme Court ruled the fee did not violate free speech.

A new challenge, still under consideration by the 3rd Court of Appeals, argues that the “pole tax” is unconstitutional because the fees are not used appropriately. In the April 11 letter, Combs’ office said the continuing legal battle doesn’t mean the clubs can avoid paying all the fees they owe since the law took effect six years ago.

[…]

“They don’t like to be seen or heard,” state Rep. Harold Dutton, D-Houston, said of the club owners. “And I think that is what caused them to get in the ditch on this thing.”

So far, Dutton is the only lawmaker defending the clubs. In an April 23 letter to Combs, he asked the comptroller why her office decided last month to send out letters while the clubs’ latest court challenge is awaiting a decision from the 3rd Court of Appeals.

“I did send her a letter, asking her what has changed,” said Dutton, who opposes the fee. He said that if sexual assault programs need money, “the Legislature ought to step up to the plate and do that.”

Instead, what often happens, he said, is that lawmakers create fees against things they don’t like, like strip clubs.

“Where does it end once you start down that road?” he said.

A spokesman for the comptroller’s office, R.J. DeSilva, indicated in an emailed response that there was nothing remarkable about the timing of the collection notice.

“Our agency regularly sends notices or updates to taxpayers on various taxes and fees,” he wrote. “This particular notice was to remind business owners that the Sexually Oriented Business Fee is still in effect while litigation continues.”

In 2012, the U.S. Supreme Court declined to hear the strip clubs’ challenge after the Texas Supreme Court determined that the fee does not violate the First Amendment.

Now, the clubs are arguing that the state “fee” is really an occupation tax that should be directed to public schools under the Texas Constitution. They contend that the fee violates the state Constitution, which requires that one-fourth of occupation taxes go to public schools, because none of the money goes to schools.

The clubs’ attorneys are also asking the court to consider free speech provisions in the Texas Constitution, which they claim are broader than that of the First Amendment.

The state maintains that the fee is not an occupation tax, though, and it rejects arguments that it encroaches on free speech.

I must have missed the news about the second lawsuit, because I didn’t find anything in my archives about it. As noted, the original lawsuit was decided in favor of the state in 2011 by the Supreme Court, so it’s fair to wonder why now, almost three years later, the state is finally demanding payment from the clubs and rejecting the argument that ongoing litigation is no excuse. That said, while I may sympathize with Rep. Dutton about how the Lege should appropriate money for various things, the fact remains that the strip club fee was passed by the Lege and has been upheld by the Supreme Court, and wishing that the Lege did its business differently doesn’t change that. Not clear what effect, if any, this may have on the city of Houston’s strip club fee, which is also still being litigated.

More reactions to the city’s settlement with the strip clubs

Not everyone likes it.

Bob Sanborn, CEO of the nonprofit organization Children at Risk, and other advocates against human trafficking said on Wednesday that they should have been consulted before a deal was struck.

Mayor Annise Parker, who brokered the agreement, said it ended a lengthy lawsuit and gives the city more funds to fight trafficking.

“We settled a 16-year-old lawsuit and it’s unfortunate that they don’t agree with my decision,” Parker said. “I don’t think we should get sidetracked by those folks who simply don’t like the adult entertainment industry.”

Sanborn said his group wants to make sure the city is committed to going after traffickers, even if they are connected to those topless clubs making yearly payments to the city. Children at Risk also wants the city to license or close almost 300 other unlicensed sexually oriented businesses, like some massage parlors and cantinas.

“Houston is a hub for human trafficking; some would say we are ‘the hub’ for trafficking,” Sanborn said during a news conference. “This is the wrong deal and it’s certainly the wrong city.”

See here and here for the background. I don’t think the city was required to consult with anyone on the settlement terms of this 16-years-long litigation, and if their goal was to bring that case to a reasonably satisfactory close then the last thing they would want to do is involve more parties in the negotiations. That said, the city clearly did at least run the terms of the deal past the other groups that were present at their own press conference. I don’t know if the city included Children at Risk on the list of those it notified about the settlement or not – perhaps they did and C@R chose not to attend that press conference, and perhaps they had a smaller list of invitees in mind. I think the terms are acceptable, and I think it makes sense for the city to try to get the bigger clubs to voluntarily cooperate so they can concentrate on the more marginal players. Licensing and enforcement is a matter of resources, and the city hopes that this settlement will allow it to deploy its resources more efficiently. Check back in a year or two and we’ll see how that’s going. As for the complaints raised by some Council members about the settlement, well, that’s just how it is. As there was no payout to be made by the city in the deal, there was nothing for Council to approve, so there was no role for them to play. There’s not much more to it than that.

One more thing:

Sanborn noted that Harris County Sheriff Adrian Garcia and District Attorney Devon Anderson support Children at Risk’s anti-trafficking efforts and read statements from each.

“Prostitution is not a victimless crime,” according to Garcia’s statement. “It’s a greedy industry that thrives on forced labor, drug addiction and sometimes even illegal imprisonment.”

The story, especially the headlines, gives the impression that Sheriff Garcia and DA Anderson were standing with Sanborn, C@R, and the other groups in criticizing the settlement. We don’t know what Anderson said, but that clip from Garcia’s statement isn’t specific to the deal. Out of curiosity, I contacted the Sheriff’s office to ask about this, and was informed that Sheriff Garcia was not making a comment on the city’s deal with the strip clubs, and has not made any comment on that deal. Like I said, that wasn’t clear – to me, at least – from the story, so now you know.

Evaluating the strip club settlement

Some interesting feedback on the city’s recent legal settlement with area strip clubs.

South Texas College of Law professor Matthew Festa said the payments are not his central concern, noting cities often condition building permits on a business planting trees or building sidewalks. Festa said the deal presents a separation of powers issue, however, in that Mayor Annise Parker’s administration is selectively enforcing city rules. It also raises a due process issue by creating a two-tiered approach to enforcement, he said.

The ordinance remains in force as written for clubs not involved in the settlement. In addition to the three-foot rule, the ordinance requires that such businesses operate at least 1,500 feet from schools, day cares, parks and churches.

“ ’You close down the private rooms, and we’ll back down on the three-foot rule.’ Those are great examples of compromise and deliberation that are supposed to be made and decided on by the legislative body, which is the City Council,” Festa said. “The settlement may, in fact, reflect a good judgment about what the law should be, but until that becomes what the law is, it’s problematic for the city to not enforce it uniformly.”

Kellen Zale, a professor at the University of Houston Law Center, had fewer concerns about two-tiered enforcement. She said the outcome strikes her as similar to grandfathering, which happens regularly in all cities, particular zoned cities where businesses that exist before land use rules change can operate under the old rules.

“The local government is exercising its police power and saying, ‘In exchange for you helping with our vice requirements, we can help with your, I guess, clothing requirements,’ ” she said. “It’s within their police power to make these arrangements that change the land use requirements or the business operation requirements for a particular business.”

Amy Farrell, a Northeastern University criminologist and human trafficking expert, found the settlement surprising. Small charges for such things as violating the three-foot rule can be useful for police, she said, helping them gain leverage for a wider trafficking probe.

“There certainly have been cities in the U.S. that have created agreements with businesses, but those were more on the regulation side and didn’t have this explicit pay-back system,” Farrell said. “We hope that communities would provide the resources to pursue these cases without needing to make bargains with strip clubs.”

Still, Farrell said, the information sharing between businesses and police, and the money to fund additional officers, could be valuable.

Mary Burke, executive director of the nonprofit Project to End Human Trafficking, refers to Houston as city that is making progress on human trafficking, but said the settlement “feels slimy.”

“I have mixed reactions. Are we somehow colluding with the perpetrator by taking this money?” she said. “That’s really fantastic to see that much money go to a human trafficking unit. I hope some of that money is given to groups who help survivors.”

Burke said she is among those who believe all sex businesses exploit and objectify women, and said she is concerned the elimination of the three-foot rule could lead to more dancers being touched or grabbed in unwelcome ways.

This story said that only five sexually-oriented businesses agreed to the deal; the original story and the Mayor’s press release said there were 16. I’m not exactly sure what accounts for the difference, but my guess is that it means five more besides the original 16 plaintiffs. Just a guess. Anyway, my impression was that it’s a reasonable deal, and it does have the effect of resolving this ridiculously long series of lawsuits and appeals. I gather that something like this hasn’t been tried anywhere else, so we’ll see how it goes. I think it was worth trying. Check back in a year or two and we’ll see if the parties involved still feel that way.

City settles longstanding litigation with strip clubs

From the Mayor’s press release:

HoustonSeal

Recognizing Houston is a hub for human trafficking, the City and 16 area topless clubs have entered into a novel settlement agreement aimed at addressing this heinous crime, ending litigation dating back to 1997 when City Council imposed new regulations on sexually-oriented businesses.

“In the 16 years since City Council acted, no original clubs have closed and new clubs choosing to ignore our regulations have grown in number,” said Mayor Parker.  “Establishing a working relationship with these 16 clubs will assist law enforcement in reducing criminal activity, help us combat human trafficking and, hopefully, allow us to focus police resources on the rogue clubs.  This settlement allows us to address the problem head on in a meaningful way with funding and staff.”

The 16 clubs will annually contribute more than one million dollars to a Human Trafficking Abatement Fund.  The funds will be used to create and staff a human trafficking unit within the Vice Division of the Houston Police Department.  In addition to contributing monies, these clubs must institute and adhere to certain restrictions and policies to aid in combatting human trafficking.  For example:

  • all private rooms and areas must be eliminated;
  • a club may not knowingly employ, hire or contract for the services of an entertainer or dancer who is accompanied by another person who speaks for her, holds her identification, collects her pay for “safekeeping” or appears to exercise control, force, or coercion over the person;
  • a club may not knowingly employ, hire or contract for the services of a person for whom a background check reveals a conviction within 60 months for a prostitution or drug offense;
  • any individual convicted of a drug or prostitution offense, public lewdness or indecent exposure at a participating club is prohibited from working at any club that is a party to the agreement;
  • any act of prostitution, public lewdness, indecent exposure or offense involving narcotics observed by or reported to a manager of a club will be reported to the City along with all remedial measures taken to ensure the activity is not repeated; and
  • all clubs will provide annual human trafficking awareness training and disseminate materials regarding human trafficking awareness.

In return, the City has agreed to allow these 16 clubs to continue operating at their same locations in much the same manner as they did prior to the 1997 ordinance.  While topless entertainment and table dances will be allowed again, laws against public lewdness, prostitution, indecent exposure and narcotics offenses will continue to be strictly enforced.  Arrests for these offenses are grounds for terminating a club from participating in this agreement.

This agreement applies only to these 16 grandfathered clubs.  Any other club offering sexually-oriented entertainment must still comply with the 1997 ordinance and all other regulatory provisions.

I’ll be honest, I didn’t realize there was still litigation pending. My most recent update on this is from 2008, but I see that as of then the city was still “involved in a lawsuit in state district courts with the 11 clubs that appealed to the Supreme Court”, which had to do with “amortization,” or the amount of time the owners should get to recoup their investments before having to close or relocate. So there you have it. The Chron story fills in some more details.

Because they still do not concede to being sexually oriented businesses, the clubs do not have to adhere to the ordinance’s regulation that they must operate at least 1,500 feet from schools, day cares, parks and churches.

“They are not saying it,” Feldman said. “But they are agreeing to do all these things that actually are a greater obligation than they would have under the ordinance if they were a (sexually oriented business).”

Any club that breaks the terms of the agreement will be dropped from the settlement, and the other establishments will have to pick up the contribution to the abatement fund.

Feldman, who began crafting the settlement in the spring, said the concept originated from a lawsuit settlement between the city and prominent strip club Treasures. In 2012, the city and Harris County Attorney’s office sued Treasures’ owner, accusing the establishment of harboring prostitution, drugs, illegal weapons and sexual assaults.

A settlement was reached last December in which the club’s owner agreed to put $100,000 in a nuisance abatement fund to combat human trafficking as well as similar provisions with the current agreement.

“That in turn gave me the idea if we can create such a fund for the purpose of addressing enforcement activities within these clubs, why couldn’t we do something similar to address the broader issue of human trafficking?” said Feldman.

Feldman said the city would be open to speaking with any other clubs that would like to come under a similar agreement.

If the agreement works well for both entities, Feldman said the next step would be grafting similar terms as a permanent provision in the city’s sexually oriented business ordinance.

See here and here for the background on the Treasures lawsuits. I presume all this means that the strip clubs will not be playing in the county elections this year.

According to Melissa Darragh, the Mayor’s social media director, the agreement is supported by HPD, the strip clubs themselves, the Houston Area Women’s Center, YMCA International, and the Houston Rescue and Restore Coalition. You’re on your own to figure out which of the clubs are among the 16 that are now approved for you to attend, however. Hair Balls has more.

County settles with Treasures

It’s over, at least for now.

When city of Houston lawyers settled a public nuisance lawsuit against Treasures last December, Harris County attorneys continued to pursue the jointly filed case, saying they needed more assurances from the strip club that it would operate above board.

Under a late-Monday settlement with the club, however, county attorneys all but pointed to the city settlement and added, “What they said.”

The agreement comes even as the plaintiffs acknowledge Treasures has violated its agreement with the city four times since December.

[…]

Just as club owner Ali Davari will pay the city $100,000 to assist the Houston Police Department in efforts to combat human trafficking, the latest agreement also will see Davari pay $100,000 to cover the county attorney’s costs. The settlement achieves enforcement beyond the city’s stipulations, First Assistant County Attorney Robert Soard said, noting Treasures must add an additional manager for weekday day shifts and for night shifts every day.

The settlement also requires Treasures managers to attend a class on human trafficking, and the club must amend the paperwork it gives independent contractors – typically, dancers – by adding language about trafficking, including a hot line victims can call.

“Yet again, they put all the responsibility on the victims, an impossible situation if they are being exploited,” said Dottie Laster, a New Braunfels-based human trafficking expert who said she is frustrated by both settlements. “It sounds like a fairy tale agreement, that the signatories are choosing to believe people aren’t being exploited, that it’s more likely everyone in there is willing.”

I don’t really know what to say to that, so let me point you to Dottie Laster’s website for more information. Look around a little and you’ll find a link to this story about the time Ann Johnson, Democratic candidate for HD134 last year, successfully argued before the State Supreme Court that minors should not be prosecuted for prostitution. Worth your time to look around Ms. Laster’s website and see what resources she has.

San Antonio strip club lawsuit

If you’re a lawyer representing strip clubs these days, you sure don’t lack for business.

More than a dozen strip clubs have sued the city of San Antonio over amendments to ordinances requiring entertainers to wear bikinis, claiming the changes are another heavy-handed attempt to shut the cabarets down.

The federal lawsuit resembles one at the center of a court battle almost 10 years ago when the city amended its human display ordinance to, among other things, bar nude dancing, set greater restrictions on lap dances and prohibit small, private and unsupervised VIP rooms in all strip clubs. It ended in a settlement.

Many of the topless clubs got around those restrictions, and greater regulation, by having entertainers wear pasties, while clubs that offered nude dancing challenged citations individually.

The ordinance pertaining to sexually oriented businesses and the human display ordinance were amended last year, with the changes meant at tightening technicalities.

The changes are set to take effect in the coming two months.

“They did a number of things, most of them were technical provisions, but of note, they changed the definition so if you are wearing less than a bikini you’re a sexually oriented business,” City Attorney Michael Bernard said. “It gets rid of this whole pasties thing.”

“The effect is to tighten up the definition of a sexually oriented business,” Bernard said. “If your business is sexually oriented, you are going to be sexually oriented under the law. Before, there were loopholes in which they avoided that.”

This sounds very similar to the original SOB ordinance in Houston that triggered a lawsuit that was finally resolved in the city’s favor more than a decade later, but a bit more restrictive. Houston has taken a somewhat different approach to policing its strip clubs these days, but it’s not out of the question that what happens in San Antonio could get imported here. So we may as well keep an eye on it.

City settles with Treasures, county still on the case

Noted for the record.

Martha approves of pole dancing

Prominent strip club Treasures, hauled into court as an alleged public nuisance and haven for crime by city and county attorneys seven months ago, has agreed to put $100,000 in a nuisance abatement fund as part of a settlement with the city of Houston, City Attorney David Feldman said.

Harris County attorneys, however, say they plan to proceed with the case. A trial was scheduled to start Monday, but has been delayed until February. If State District Judge Alexandra Smoots-Hogan declares Treasures a public nuisance, the club would close for a year.

The suit, filed jointly by the two governments in May, seeks to close the club at 5647 Westheimer for allegedly harboring prostitution, drugs, illegal weapons and sexual assaults. The club’s attorneys deny the allegations.

Feldman said the terms of the settlement are to be kept confidential to the extent possible. The Houston Chronicle late Monday submitted a Texas Public Information Act request for the settlement agreement.

Feldman said the agreement allows the city to achieve its aims in filing the suit, and then some.

“The parties have committed to work together to abate any nuisance activities which might occur in Treasures and have joined together to eliminate certain illegal activities in the city of Houston, including human trafficking,” Feldman said. “The agreement … puts procedures, verification and a fund in place that provide an opportunity for abatement in the short and the long term, which goes beyond what litigation might achieve.”

[…]

The County Attorney’s Office, which technically is representing the state of Texas in the suit, remains unsatisfied.

First Assistant County Attorney Terry O’Rourke said the city’s decision to settle does not weaken his case.

“The idea that this agreement would remain secret is preposterous,” O’Rourke said, adding his office was not even given a copy of the agreement. “This case is going to trial. We will get them.”

I’m not qualified to address the secrecy question – it seems strange to me, but I’m not a lawyer – so I don’t really have a point to make. I just figured that after all the drama and intrigue, I ought to at least stick around to see how it all turns out. I suppose after funneling all that money to his opponent, Vince Ryan has no particular incentive to be accommodating. Along those lines, I will simply note that Judge Alexandra Smoots-Hogan, who was also targeted by Team Treasures, was the top vote-getter among Harris County judicial candidates, with 581,309. Her opponent, Bud Wiesedeppe, was the low scorer among judicial candidates, with 550,095 votes. There’s nothing illegal or unethical about a party to a legal action targeting the prosecutor or the judge politically. But perhaps the outcomes here will provide a small measure of disincentive for the future.

Today’s the day

Still the only voter ID anyone should need

At long last, the death march known as Election 2012 will come to an end today, at which time we can begin gearing up for the next elections in 2013, 2014, and 2016, as well as dreading what the Legislature has in store for us. If you haven’t already voted, you can find your Harris County Election Day polling place here, or if you know your precinct number you can look up your location in this spreadsheet sent out by the County Clerk’s office. If all else fails, call the County Clerk’s office at 713 795 6965 for assistance.

Want more? You can get a free ride from Metro if you show your voter registration card. If you don’t have your voter registration card you can’t ride free on Metro but you can still vote as long as you have one of these other forms of identification. (Note: May not work in Williamson County.) As I expect that something like 60 to 70% of the votes have already been cast in the county for this election, I figure the lines won’t be too bad, but I still wouldn’t advise waiting till the last minute if you can help it. Remember, state law entitles you to at least two consecutive hours off on Election Day to vote, so take advantage of it as needed.

The best thing that can happen while people are voting is for nothing remarkable to happen. There will be Justice Department election monitors in Harris County to keep an eye on things in the event there is anything hinky going on. The less news there is to report about that, the better.

If you can’t bear the thought of having to wait till tomorrow morning to know what I think about what’s happened, you can tune into KPFT radio tonight from 7 to 10 to hear me blather on about it. I’ll be a guest on Mike Honig’s ThinkWing Radio show, which can be found at 90.1 FM on your dial or by going to KPFT.org and clicking on “Listen Live”, which naturally can be done from anywhere there’s an Internet connection. I may if I get ambitious dust off my badly neglected Twitter account (@kuff) and use that for quickie updates while waiting for my turn to speak. Don’t ask me about hashtags, I’m not that organized.

I will also be taping not one but two episodes of “Red, White, and Blue” on Houston PBS this week, one on national election results to run on the 9th and one on local election results to run on the 16th. By the time all this is done even I will be sick of me talking about the election. I’ll have more details on that later, in case you’ve ever wondered what I look like in a suit and tie.

Finally, an amusing tidbit to send you off to your polling or poll-watching place. Remember that story about campaign contributions made by people connected to the strip club Treasures to Republican candidates like Robert Talton? You can see all that on Talton’s eight day campaign finance report. If you look a little farther down on that report, however, you will also see a $15,000 expenditure made to the Texas Conservative Review for an advertisement. The TCR is of course owned by Talton’s law partner, Gary Polland. Guess who is also a lobbyist for Treasures? That would be Gary Polland. It’s like the circle of life, you know? I’m going to miss having these guys involved in the election.

More strip club cash in the county races

Given the prevalence of strip clubs in Houston, I’m actually a bit surprised we don’t see more of this in our elections.

My, what big wads of cash you have

Four people associated with the strip club Treasures have contributed a combined $48,700 to the Republican challengers for Harris County attorney and a civil district judgeship – men who could, if elected, oversee an ongoing lawsuit against Treasures.

County Attorney challenger Robert Talton reported in a campaign filing on Monday that he got $15,900 from Casey Wallace, $6,000 from Ronald Monshaugen and $5,000 from Al Van Huff, all attorneys representing Treasures, as well as $7,000 from Ronnie Bird, the club’s longtime head of corporate security. The same foursome gave a combined $14,800 to judicial candidate Bud Wiesedeppe, who is seeking the bench in the 164th Civil District Court, where the Treasures case is being heard.

City of Houston and county attorneys sued Treasurers last May, labeling the club “an epicenter of illegal activity” and seeking to shut it down for a year. The club says it is being retaliated against for challenging the city’s sexually-oriented business ordinance. Trial is set for Dec. 10.

Lauren Serper, an attorney for other adult cabarets in the county, also contributed $3,000 to Talton and $2,000 to Wiesedeppe, records show. Serper gave input as the county strengthened its rules on sexually oriented businesses, rules that passed unanimously at Commissioners Court last month.

The five donors’ cash comprised 42 percent of Talton’s total contributions during the Sept. 28-Oct. 27 filing period, and half of Wiesedeppe’s.

As previously noted, Treasures is all in for GOP Sheriff candidate Louis Guthrie. Here’s Talton’s report, and here’s Wiesedeppe’s report. Did you know that Robert Talton and Bud Wiesedeppe both work for Harris County GOP Chair Jared Woodfill’s law firm? That doesn’t have anything to do with this story, I just find it all amusing.

Commissioner Jack Cagle, who led the charge for the county’s new sexually oriented business regulations, said Talton assured him in a Thursday night phone call that he is committed to enforcement.

“There may be a statement that’s being made by some individuals that if you get involved in trying to clean up your streets that someone out there may choose to start making contributions to your opponents,” Cagle said. “Once that occurs, though, there’s no assurance that the opponent is going to agree with their position.”

Houston political analyst Robert Miller said lawyers, and others, have a right to make political contributions.

“That is our system, and our system of regulation is simply to disclose those contributions,” Miller said. “It’s clear that they want to elect (Talton), and voters would have to draw their own inferences as to why that is. Just because they want to elect him does not mean he would necessarily be favorable to them.”

This is all true. It’s also true that there’s a reason you don’t see these contributions earlier in the cycle. This is why the 8 day finance report is almost always the most interesting one to check out.

Strip club cash in the Sheriff’s race

The waning days of a campaign always have the greatest potential for hijinx.

A $25,000 political contribution from the owner of a strip club being sued by Harris County lawyers found its way, via the Harris County Deputies Organization, into the campaign coffers of the man challenging Sheriff Adrian Garcia in November, according to campaign finance reports.

Ali Davari, who with his brother Hassan Davari owns a handful of prominent local strip clubs, including Treasures, Gold Cup and Trophy Club, gave $25,000 to the deputies union political action committee on Oct. 15. It was the only contribution the organization received during the time period covered by the report, which was filed Thursday. The union donated the same amount, in its only listed expenditure, to Republican Louis Guthrie’s campaign a week later, earmarking it for political advertising.

Guthrie reports receiving a $25,000 check from the union on Oct. 9; Guthrie’s campaign manager Sara Kinney said the campaign listed that date because that was the date on the check. HCDO Vice President Eric Batton could not explain the discrepancy in the dates.

“The deputies organization, whatever they do is what they do,” Guthrie said. “The fact that they gave me money, I think it’s great they’re behind me and that they’ve endorsed me in this campaign. I can’t control the deputies organization, the money they take in from whomever.”

Guthrie and Batton accused the Houston Chronicle of writing about the contribution to help Garcia, whom the Chronicle editorial board has endorsed for re-election.

[…]

Houston political analyst Robert Miller said such pass-though donations are common, such as when donors do not want to publicly oppose an incumbent and donate to a political group instead.

“It’s unusual to see it so clumsily done,” Miller said. “By doing it in this manner and with this timing, they have waved a red flag all over the contribution. It would be evident to most that it’s a contribution from the sexually-oriented business to a sheriff’s candidate.”

For reasons unclear I can’t find the HCDO 8 day report on the County Clerk campaign finance report page. The Garcia campaign sent out an email about this that has a few more details. The reaction to the story by everyone involved tells you pretty much everything you need to know about it.

UPDATE: A copy of the 8 day report is here.

Strip clubs sue city over $5 fee

Remember the $5 per customer strip club fee that was added as a budget amendment by CM Ellen Cohen as a way to fund clearing HPD’s backlog of rape kits? The clubs threatened to sue the city at the time this was debated, and last Thursday they followed through on that threat.

CM Ellen Cohen

In the lawsuit the strip clubs argue that the $5 per-customer fee on sexually oriented businesses passed by Council in June is unconstitutional on several grounds:

  • That state law requires that fees be based on the cost of processing permits and investigating applicants, whereas Cohen pushed the fee simply to raise money for the rape kits.
  • That a city cannot levy a tax targeting an occupation unless the state has already done so. Cohen’s state legislation applies to live nude entertainment. The plaintiffs offer what the city calls “semi-nude” entertainment, so their businesses are exempt from the state fee and therefore can’t be targeted by the city.
  • That it violates state law requiring that such taxes be equal across an industry. Here the strip clubs argue that they’re being singled out by a fee because of high prostitution, violent crime and drug use near adult establishments while the areas around bars without strippers have even higher rates of such crime.
  • It’s an infringement of the right to free speech. While a state court rejected this argument as it applied to Cohen’s state legislation governing nude entertainment, the ruling did not find that the spillover crime effects justifying free-speech restrictions were not as great for businesses that present semi-nude entertainment.

The ordinance and requested council action from June can be seen on starting on pdf page 123 here.

The story doesn’t have a copy of the suit, so the best I can do is tell you that it’s case number 201260353, which you can find on the District Clerk webpage. I reviewed the history of the strip clubs’ lawsuit against the state over that fee here. I’ll leave it to the legal experts to opine whether this suit has a better chance of success than that one did.

Council defers on strip club fee

Tagged for a week.

Consideration of a $5-per-head fee on customers of strip clubs to pay for reducing the city’s backlog of untested rape kits has been delayed for a week.

Council members Melissa Noriega and Al Hoang both tagged the item, a parliamentary maneuver that puts off an agenda item for one week, no questions asked.

Neither Noriega nor Hoang said they were against the plan but wanted more time to consider the measure, which was introduced a week ago by Councilwoman Ellen Cohen.

I suspect this will go through in the end. The clubs themselves are unsurprisingly not happy at the prospect, but their main argument against is unlikely to strike fear in anyone’s heart.

Al Van Huff, lawyer for several Houston-area strip clubs, said the city can expect a court fight.

“It sounds great if you’re a politician,” Van Huff said. “The reality of the situation is, it’s going to be expensive for the city to attempt to impose such a tax on these businesses.”

Enforcing a city ordinance also could be complicated. Cohen estimated that about 30 clubs would be affected. Van Huff said fewer than a handful of clubs fit the city’s definition of a sexually oriented business, while an additional 50 clubs’ entertainers wear just enough clothing to skirt the classification.

The fee unfairly targets clubs with the intent of making them unprofitable and forcing their closure, Van Huff said. The clubs already are responsible for taxes as well as the state fee, he said.

The State Supreme Court upheld the legality of the state fee, and the US Supreme Court declined to hear an appeal of that ruling. That case isn’t the be-all and end-all, it was strictly about the constitutional free speech issue, so the clubs may find a more promising avenue for litigation, but again the historical record is against them, as their suit against the 1997 SOB law ultimately went nowhere. Whether or not you approve of the idea, I don’t see litigation as a big threat to it.

Meanwhile, another budget item moves forward.

City Council‘s Ethics, Elections and Council Governance Committee will consider a charter amendment ballot proposition to change term limits from six to 12 years.

Councilman Andrew Burks proposed doubling Council terms from two to four years and keeping the three-term limit in place. Houston voters would have to approve a ballot measure to change current term limits, which are more than two decades old.

The committee would review ballot language, which Burks says will save the city $3 million each two years by reducing the number of elections for the mayor, 16 Council members and controller. Councilwoman Wanda Adams is a co-sponsor of the Burks proposal, which was submitted last week as a budget amendment.

The full Council would have to act by Aug. 20 to place language on the November ballot.

Burks said two-year terms are so short that “We really can’t get anything done” because Council members need to campaign for re-election. Extending terms “improves upon the ability of Council members and mayor to do a better job,” he said.

Councilwoman Helena Brown and Oliver Pennington voted against sending the matter to a Council committee.

“Four years is too long a time for change-out if we’re not doing our job right,” Brown said.

My thoughts exactly, Helena. If this gets approved, it will be yet another referendum on the fall ballot. Get ready to do a lot of voting, y’all.

And finally, there was the plastic bag issue.

Council has approved a budget amendment ordering city officials to consider doing something about the litter problems presented by plastic bags or even to phase them out.

Councilman Ed Gonzalez’s original amendment called for preparing an ordinance within a year that would address a bag ban. Gonzalez spoke of looking to Austin, where a plastic bag ban is in effect, as a possible model.

Numerous speakers criticized the proposal at Tuesday’s public session. The amendment was watered down Tuesday night to say the city should only ”address phasing out plastic bags” and deleted mention of an ordinance. At the Council table today, Councilman Oliver Pennington further softened the proposal by adding language calling on the city to “address littering by plastic bags or phasing out plastic bags.”

Not really sure what that amounts to, but we’ll see. I’m still perfectly fine with the idea of charging a fee for plastic bags and using that money to clean up trash around the city.

UPDATE: In the end, the budget was approved, along with a few other amendments.

SCOTUS declines to hear strip club tax case

The end of the road for this particular bit of litigation.

The U.S. Supreme Court will not take up the adult entertainment industry’s lawsuit against the state’s $5-per-patron strip club tax, justices decided Monday.

“Texas is now one step closer to a sustainable source of funding for rape crisis centers, and most importantly, for supporting sexual assault survivors in their recovery,” said Annette Burrhus Clay, executive director of the Texas Association Against Sexual Assault.

That means the Texas Supreme Court’s ruling — that the fee does not violate the First Amendment — stands. But it doesn’t mean that the industry, years into its legal battle, can’t file yet another suit against other elements of the tax.

The story doesn’t go into what other grounds there may be for litigation, and I don’t care to think about it at this time. Here’s a reminder of the timeline in this case, which first got a ruling from a district court judge in 2008. As I recall, it took about a decade for all the lawsuits over the city of Houston’s SOB ordinance to be resolved. Check back in 2018 or so, I guess.

Supremes uphold strip club tax

In a ruling that reverses the 3rd Court of Appeals, the State Supreme Court has unanimously held that the so-called “pole tax” is constitutional.

The Texas Supreme Court ruled Friday that a $5-per-customer fee on strip clubs that serve alcohol doesn’t violate free speech rights.

[…]

“We think a $5 fee poses no greater burden on nude dancing,” Justice Nathan Hecht wrote for the court. “The fee in this case is clearly directed, not at expression in nude dancing, but at the secondary effects of nude dancing when alcohol is being consumed.”

He further added that businesses could avoid the fee altogether by simply not allowing consumption of alcohol.

Here’s a copy of the ruling, via the Trib, which had previously noted that many clubs had not been paying the tax along the way as they had been required to do pending final disposition of the lawsuit; they’ll be getting a collection notice from the Comptroller soon. Just to give you an idea of how quickly our judicial system works, remember that the original legislation passed in the 2007 legislative session. In March of 2008 a Travis County district court judge ruled the tax unconstitutional. That ruling was appealed to the 3rd Court, which heard arguments in February of 2009, and upheld the lower court in June, a mere four months later. That ruling was appealed to the Supreme Court within a week, and was heard by the Supremes in March of 2010. Nearly a year and a half later, we finally have their ruling. You just can’t rush these things. Hair Balls has more.

Supreme Court hears strip club appeal

The state Supreme Court has heard arguments in the appeal of the strip club fee lawsuit.

Lower courts have sided with the strip clubs, ruling that the fee that has collected more than $13.6 million since 2008 is an unconstitutional regulation of free expression.

The law specifically applies to strip clubs that sell alcohol. Texas Solicitor General James Ho told the nine Republican justices that the fee is justified, since the state could already impose bans on both.

“It would be turning the First Amendment on its head to say that you can criminalize but can’t impose a modest regulation,” Ho said.

The court is not expected to issue a ruling for months.

The 3rd Court of Appeals ruled in favor of the clubs back in June; the state appealed to the Supreme Court a day later, and the Supremes agreed to hear the case last month. The high court is not known for the swiftness of its rulings, and as the Trib notes, this case was heard late in its term, so don’t expect a decision before next year.

Supreme Court to hear strip club tax appeal

Once more to the courthouse for supporters of the $5 strip club tax that was levied by the Lege to fund sexual abuse and violence treatment and prevention programs, as the state Supreme Court has agreed to hear an appeal of the lawsuit that overturned that law.

“I’m extremely happy that they agreed to hear the case,” said State Rep. Ellen Cohen, who sponsored the legislation and filed an amicus brief urging the court to review the matter. “If you’re going to do this, you need to raise a substantial enough amount of money to make a dramatic effect on issues surrounding sexual violence. The way we fashioned it was absolutely the correct way and the most reasoned way.”

The law was struck down in March 2008, by a Travis County District Court judge, a ruling that was upheld in June by the Austin-based 3rd Court of Appeals. The state has collected more than $12 million in fees that have been held in escrow pending the final outcome of the case.

I’ve followed this case since the original suit was filed – the original ruling, the first appeal and subsequent upholding of the law, and the appeal to the Supremes, which for those of you tracking their calendar happened back in June. One way or another, we’ll (eventually) get a final answer on this.

Strip club fee appealed to Supreme Court

As expected.

The legal battles continue to spin around Texas’ so-called “pole tax,” a $5 entrance fee at strip clubs that has been ruled an unconstitutional regulation of free expression.

Lawyers for Texas Attorney General Greg Abbott and state Comptroller Susan Combs on Thursday asked the Texas Supreme Court to overturn lower courts that have said the 2-year-old law is unconstitutional.

The fee was meant to fund programs assisting victims of sexual assault. Many clubs have ignored the fee, but more than $12 million has been collected. The money is being held in an account pending the legal battle’s outcome.

The Texas Entertainment Association, which represents strip clubs across the state, sued and a state district judge struck down the law in 2008. A 2-1 ruling last week by the Austin-based 3rd Court of Appeals said the tax improperly singles out a form of expression, nude dancing, for regulation.

As we saw with the Third Court’s opinion, the proponents of the tax believe they have hope for a reversal by the Supremes. I just have my doubts that the matter will be resolved before the courts before the Lege gets another crack at it. Who knows, maybe it’ll be on the call for the special session.

Appeals court upholds strip club tax ban

Score two for the state’s strip clubs.

The 3rd Court of Appeals panel sided against the $5 per-patron fee, passed by the Legislature in 2007 with the goal of raising sexual-assault prevention funds, in a divided 2-1 opinion released Friday.

The split decision, which contained a dissent by the panel’s only Republican justice, rejected the state’s argument that the fee is a lawful alcohol regulation. The justices, rather, said the charge amounted to a content-based tax on protected speech at sexually oriented businesses.

“Differential taxation based on content is subject to strict scrutiny,” the justices wrote in the opinion, referring to a legal standard for such cases that allows speech regulations only if there is an compelling government interest in protecting the public.

Advocates for sexual assault programs were heartened, though, by a strongly worded dissent by Justice David Puryear and by a concurring opinion by Chief Justice J. Woodfin Jones that seemed to open the door to similar regulation in the future.

“We’ve always known that this case would end up at the Texas Supreme Court, no matter how the 3rd Court ruled,” said Torie Camp, deputy director at the Texas Association Against Sexual Assault. “We look forward to pressing those very same arguments before the Texas Supreme Court.”

Puryear wrote that the law should stand because it isn’t aimed at preventing or suppressing topless dancing, but rather seeks to combat a possible correlation between alcohol, erotic expression and sexual assault.

“The statute seems concerned with the regulation of alcohol or the regulation of alcohol and erotic entertainment rather than the suppression of any specific erotic expression,” he wrote.

The original suit was filed in December 2007, three months after the law took effect. The law was struck down last March. You can find the court’s opinion upholding the ruling, written by Justice Henson, here, Chief Justice Jones’ concurring opinion here, and Justice Puryear’s dissent here. I tend to agree with Ms. Camp that the Third Court has given the state hope going forward. Having said that, given the glacial pace at which the Supreme Court operates, I think there’s an excellent chance that the 82nd Lege will be able to address this before they issue a ruling.

Strip club fee dies

Boy, I had sure thought that HB982, the alternate strip club fee bill by Rep. Senfronia Thompson had passed the Senate, but apparently the vote to pass it was reconsidered and was never taken up again, so as a result, it’s dead.

That means the current version of the fee – which was approved in 2007 – will stay in place. But it’s been tangled in litigation for the last two years over constitutional questions. Without a legislative solution, it will be up to the courts to decide whether the fee stays in place.

It’s usually the case that a bill you’d swear was dead makes some kind of miraculous last-minute comeback. This session, you couldn’t say for certain that something has passed until it actually hit the Governor’s desk. You just never knew.

City takes aim at more SOBs

Eight months ago, the city of Houston succeeded in closing down a strip club, its first such victory after finally getting a favorable verdict in the lawsuit to overturn the 1997 ordinance that more strictly regulated sexually-oriented businesses. They’re now hunting more game.

Lawyers for the city filed a lawsuit Friday to close a Galleria-area topless club for not having a sexually oriented business license, the beginning of a City Hall crackdown on dozens of unlicensed clubs across Houston.

The lawsuit followed the arrest Thursday evening of nine employees of All Stars Men’s Club, 2688 Winrock, including six dancers charged with solicitation of prostitution.

The suit asks 113th District Judge Patricia Hancock to issue a permanent injunction, arguing the club would not qualify for a required license because it is located 800 feet from a church and is closer than 1,500 feet to an area more than 75 percent residential.

“This is part of a bigger effort by the White administration to use the powers that are available to the city to protect and improve the quality of life in the city’s neighborhoods,” said private attorney Patrick Zummo, who was hired by the city to help enforce its sexually oriented business ordinance.

“We are working on another lawsuit that would include many of those businesses that are operating illegally, and which will probably be filed in the next couple of weeks.”

Better visit ’em while you still can, fellas. I’ll bet the city has spent the intervening time getting its ducks lined up, so barring a surprise these are the last day for the All Star Club, and whoever is in the city’s sights after it.

“We know from both Houston’s experience, and the experience in cities across the country, that sexual oriented-businesses are associated with higher rates of crime in the area around them and with lower property values,” Zummo said. “That’s why the federal courts allow reasonable regulation of these businesses.”

Again with the claims about increased crime, though I note that this time Zummo didn’t say “violent crime”. Seems to me that an investigation, by a professional news-reporting enterprise, as to the veracity of such claims would be a good idea. Maybe some day.

The fees not paid

The battle over the dueling strip club bills in the Lege this session has mostly been over how much revenue each would collect. But the state has to actually collect that revenue for any of that to be relevant.

Dozens of strip clubs across Texas have ignored a 2007 law requiring them to charge a $5-per-patron entrance fee, potentially costing the state millions of dollars meant to fund sexual assault programs, records show.

Not a dime has yet been used to help the victims of sexual assault.

Since the law went into effect last year, only about $12.2 million has been collected by the state under the law for sexual assault prevention and treatment, far less than the $50 million that had been expected.

“We are, of course, disappointed,” said Annette Burrhus-Clay, executive director of the Texas Association Against Sexual Assault. “But hopefully there will be more resources set aside for the comptroller to actually monitor this in the future.”

For whatever the reason, I don’t recall seeing that $50 million figure before, but it’s right there in the fiscal note to the original bill, so it must just be a case of faulty memory on my part. Having said that, the modified bill filed by Rep. Ellen Cohen was projected to bring in $16.5 million in annual revenue, or about a third as much. I suppose that’s why the $50 million figure surprised me; the difference is so great.

Cohen said she wasn’t surprised that some clubs have ignored the current law, especially in light of the uncertainty created by the court challenge and by the pending legislation.

“If they want to wait and see what’s going to happen, that’s their choice. They may end up having to pay it and penalties — I don’t know,” she said. “I do respect those clubs that have stepped up to the plate and paid.”

[…]

Topless and nude clubs in Houston and San Antonio have remitted about $4.3 million, about a third of the state total, records show.

More than 100 clubs, however, have ignored the fee entirely, while others have paid only small amounts. Some say they don’t want to charge customers more at the door.

Obviously, the court challenge changed things, but I have to ask – what would be the enforcement mechanism for this? I’m guessing a civil suit brought by the Attorney General. I suppose any license renewals, say from the TABC, can be denied pending payment of back taxes as well. Anybody know the answer for sure?

Cohen pulls strip club bill

The battle of the strip club bills is over, as Rep. Ellen Cohen has pulled her bill, thus killing it for the session.

She said “it was clear there was an attempt to find a point of order” — a type of parliamentary maneuver — to kill her measure. So she postponed her measure until after the end of the legislative session, effectively abandoning it. She said she decided to focus instead on fighting for the fee that’s being challenged in court.

The Legislature in 2007 passed a $5-per-patron strip club fee that Cohen proposed. The money was supposed to go toward health insurance for low-income Texans and programs to prevent sexual assault and help victims.

But a judge struck it down, and this year, Cohen proposed tweaking the fee. The state is appealing.

Cohen’s proposal this session was to lower the fee to about $3 per patron and to direct the money only to anti-assault programs, not health insurance. Last year, State District Judge Scott Jenkins found that the state showed a link between strip clubs and sexual violence but failed to show a link between strip clubs and a lack of health insurance.

Judging by what I was seeing on Twitter while this was going on, Rep. Harold Dutton appears to have been the main point-of-order wielder. Even if Rep. Cohen had pressed on, the alternate bill, Rep. Senfronia Thompson’s HB982, which passed the Senate on Tuesday, had a trick up its sleeve.

In a highly unusual vote, the Texas Senate rescinded its earlier final approval of a bill allowing for a new tax on strip clubs — not to fix a wording problem, but to help settle a personal battle in the House.

The issue is between two state representatives from Houston — Ellen Cohen and Senfronia Thompson.

Sen. John Carona, R-Dallas, the Senate sponsor of Thompson’s bill that passed Tuesday, said Thompson wanted to ensure that her bill prevails over a similar measure by Cohen. Cohen’s bill would add a mandatory $3 entry fee on strip clubs, while Thompson’s proposal — one favored by strip club owners — would impose a voluntary tax.

After getting the earlier vote rescinded — a move that veteran senators said they had never seen happen — Corona made it clear he did it at Thompson’s request, not some “big policy issue out there.

“This is all about Representative Thompson and Representative Cohen. It’s their battle,” Carona said. “Senfronia called on me just because she and I have worked successfully on a lot of bills over the years. I guess she figures I was either dumb enough or tough enough to get it passed. I’m still trying to figure out which one.”

The Senate on Tuesday had given final approval to the voluntary tax, and the bill was on its way to the governor. Then, Cohen’s bill came up for debate in the House, meaning it might pass after Thompson’s bill did.

Since the last bill to hit the governor’s desk prevails, Thompson wanted to ensure that her bill would be last.

Of course, it may get vetoed once it gets there, as the Texas Association Against Sexual Assault opposes HB982, and it counts Anita Perry as a board member, so if her word carries any weight, that will be that. At least one other prominent Republican woman has come out against HB982 as well. We’ll know soon enough.

UPDATE: Well, what do you know? Cohen’s bill may live again.

A compromise being brokered by Sens. John Carona, Royce West and Rep. Ellen Cohen would combine the two bills, one supported by sexual assault prevention groups, the other endorsed by the adult entertainment industry.

Though nothing is firm, the compromise bill being considered would allow the Texas Supreme Court to rule on the constitutionality of a $5 per person strip club admissions fee, which has been tied up in litigation since that fee was instituted in 2007.

If the Supreme Court rules in favor of the state, the fee would stay in effect, but would drop to $3. Clubs that haven’t been paying the fee would not face penalties.

If it is ruled unconstitutional, the fee would be repealed, and the state would charge strip clubs a tax of at least 10 percent on admissions fees. The tax would do what the current fee is designed to do — raise money for sexual assault services. Clubs that have been paying the current $5 fee would be refunded with interest.

It ain’t over till it’s over, I guess.

Tuesday Lege roundup

Some more notes about what has been happening in the Lege…

– It looks like the program to test high school athletes for steroids will be scaled back.

Texas lawmakers have reached a deal to slash steroid testing of public high school athletes to less than half of the current program, but still leave it big enough to test thousands of athletes over the next two years.

The deal was struck by House and Senate members negotiating the 2010-2011 budget, lawmakers said Tuesday.

The current $6 million program was designed to test up to 50,000 students by the end of the current school year. The tentative deal for the new program would slash funding to $2 million over the next two years.

Good! Zeroing it out completely would have been better, but I can live with this. Maybe next time it’ll go away.

– There’s still some hope for the omnibus gambling resolution, but Rep. Ed Kuempel has a backup plan ready anyway.

UPDATE: Brandi Grissom tweets that “the fat lady has sung” for the gambling bill.

– If you’re under 21, getting a driver’s license for the first time just got harder.

– A tax on smokeless tobacco, which would fund a medical school repayment fund for doctors who agree to move to rural areas, passed the House.

– And finally, Rep. Senfronia Thompson’s HB982, the alternate strip club tax, has passed the Senate.

The Texas Senate voted on Tuesday to repeal a $5-per-person admission fee on strip clubs that has been ruled unconstitutional and agreed to replace it with a new tax on sexually oriented business.

The bill now goes to Gov. Rick Perry for his consideration even as House members were poised to debate a competing bill favored by sexual assault victim advocates.

Passed in 2007, the strip club admission fee has been ruled unconstitutional by a judge and is currently under appeal. Money collected under that fee was sent to a fund to help sex assault victims and a pool for uninsured Texans.

The new tax proposed by Rep. Senfronia Thompson, D-Houston, would apply to adult movie theaters, adult video stores, adult bookstores and other sexually oriented businesses that charge admission fees. It would total 10 percent of gross admissions receipts.

According to a legislative analysis, the new plan would send 25 percent of the new fee to a state school fund and the rest to a sexual assault victims fund.

But some advocates for victims say the new bill is a ruse put forth by strip club owners, who would not be required to charge admission to their clubs, and would sharply reduce the money collected to help assault victims.

The Texas Association Against Sexual Assault instead supports a separate House bill by Rep. Ellen Cohen, D-Houston, who pushed the original $5 fee. Cohen’s bill would reduce the club entry fee to $3 and dedicate all the money to the sexual assault fund.

Rep. Cohen’s HB2070 is still pending in the House. More here.

Monday Lege roundup

Lots of legislative action today beyond the voter ID vaudeville act. Here’s a quick roundup of some other bills of interest.

HB1736, also known as the Tim Cole Act for the man who was posthumously exonerated this February, has passed both chambers and is on its way to Governor Perry’s desk. The bill increases the compensation given to those who are exonerated after being sent to jail. Grits has the story, and more info is here and here.

– The statewide smoking ban is stuck no more.

A statewide smoking ban was endorsed by a Senate panel today, after authors agreed to exempt cigar bars, patios of restaurants and bars, and nursing homes.

Sen. Rodney Ellis, D-Houston said the compromises were necessary to resuscitate the measure, which he called a matter of life and death.

“It goes a long way toward reducing the incidence of cancer in Texas,” he said of his bill. It cleared the Senate Health and Human Services Committee on a 5-3 vote.

Committee Chairwoman Jane Nelson, R-Flower Mound, joined the panel’s four Democrats in voting for the bill, which Ellis praised as “much stronger” than a companion measure in the House that was watered down Friday to exempt 224 of the state’s 254 counties, limit enforcement and carve out many loopholes for bars.

So Sen. Nelson was true to her word. Kudos to her for that. SB544 still has to pass the full Senate and then get reconciled with the House bill, once it passes that chamber. There’s still work to be done, in other words.

Solar energy gets a boost.

[SB541] by state Sen. Kirk Watson, D-Austin, would provide so-called renewable energy credit incentives for electric generation from equipment manufactured in Texas and sets a goal for electricity generated from sources other than wind at 1,500 megawatts by 2020.

“This is designed to help bring large, industrial-size solar facilities to Texas,” Watson said. “This is about looking forward to the future — in alternative energy, jobs and manufacturing — much the same we did for wind a few years ago.”

Good. ACT Texas and Environment Texas cheer, and I join them in that.

– Finally, both strip club bills, Rep. Senfronia Thompson’s HB982, and Rep. Ellen Cohen’s HB2070 were scheduled for votes today, the former in the Senate and the latter in the House. You have to figure there can only be one, so we’ll see which one survives.

More on the alternate strip club tax

After publishing about the alternate strip club tax that passed the House yesterday, HB982, I had some correspondence with the offices of Rep. Ellen Cohen and Rep. Senfronia Thompson about the revenue estimates, which I noted seemed quite divergent. Rep. Cohen’s office sent me the following documents:

HB 982 revenue estimates (PDF) – This is a summary of the UT study referenced in the DMN story, which pegged the revenue totals in the $500K – $1.2M range.

Estimates for HB 2070 (PDF) – This is a similar study, by the same folks at UT, for Cohen’s bill that modifies the existing law that was struck down by the district court in Austin, HB 2070. This projects $16.5M in revenue annually from HB 2070.

TEA-Judgment (PDF) – This is a copy of the judgment the strip clubs won against the current law, which was HB1751 from last session. Rep. Cohen’s office asserts that HB2070 addresses the issues that the court specified in its ruling for the plaintiffs.

Rep. Thompson’s office sent me the following statement, which is taken from three separate emails:

The revenue estimate is based on a review of the books of 60 of the 175 strip clubs in Texas. The 60 clubs based on their actual collected cover charges for 2008 would have produced over $3 million. Taking into account the size and revenues of the other clubs it was projected that the clubs alone would produce $4 -$8 million dollars. Because no one is sure what revenue the other SOBs will produce that amount was not included in our estimate. This is a low ball estimate since the previous projection on HB 1751 was so much higher than actual revenue produced.

There is absolutely no reason the money already collected can’t be spent as soon as the AG drops the appeal of HB 1751. If HB 982 doesn’t pass the State is on the hook for more lawyers’ fees ($500,000 for the plaintiffs so far and $180,000 for the AG) plus interest on all money collected by the state so far. The plaintiffs in the suit had committed to Rep. Thompson that if HB 982 passes they will not further pursue the lawsuit against HB 1751 and will drop their tax protest when the AG drops his appeal of HB 1751, allowing the money already collected to be distributed this biennium. Further, the plaintiffs have told our office and Representative Cohen’s office that they will file another lawsuit if HB 2070 passes. It generally takes over a decade for a civil suit to progress from State District Court to a final U.S. Supreme decision. Rep. Thompson’s position has never been that HB 982 will raise more money than HB 2070, but that it will deliver money to these long underfunded programs this year, not next decade.

We would like to point out that Rep. Thompson passed the legislation that established the Sexual Assault Fund in 1993 that all the bills are intended to fund. She successfully fended off two attempts to roll the Sexual Assault Fund into general revenue in 1995 and 1997. She also passed the Omnibus Protective Order bill and the legislation that made the National Domestic Violence hotline possible. Rep. Thompson has a long record of standing up for women’s issues. Rep. Thompson’s concern all along has been that the state stop wasting money in court cases on unconstitutional taxes and concentrate on finding a source of revenue for these programs that will help this year not after a decade long court battle.

So there you have it.

Alternate strip club fee bill passes House

I didn’t realize there was another bill dealing with the strip club fee out there, but there is, and it passed in the House.

Sexually oriented businesses, including adult video stores and nude dancing clubs, would pay a 10 percent tax on their entry fees under a bill tentatively passed today on a voice vote in the House.

The revenue generated is expected to be significantly less than the clubs alone would have paid under last session’s bill that added a $5 per-patron fee. The clubs have successfully attacked that law as a violation of the First Amendment because much of the money was earmarked for low-income health care. The state’s appeal is pending at Austin’s Third Court of Appeals.

The 10 percent tax would raise up to $8 million, compared to an estimated $40 million that budget analysts anticipated from the 2007 law (only $11 million has been paid to Texas so far, and is being held by the state comptroller pending the outcome of the legal challenge).

Rep. Senfronia Thompson, D-Houston, offered a bill backed by the Texas Entertainment Association, which represents the clubs. The bulk of the money would fund services for sexual assault prevention and victims’ services.

“We’re going to be able to end the lawsuit and allow the state to be able to spend $11 million,” said Thompson.

Rep. Thompson’s bill is HB982, and it passed the House by a near-unanimous vote of 142-1. Rep. Ellen Cohen voted for this bill, but is still pushing her alternative as well.

Cohen has dozens of co-authors on her own replacement bill, which she says would address the courts’ concerns by reducing the per-person charge to $3 and making sexual assault prevention programs the sole beneficiaries. Cohen, whose bill is in committee and has not yet come up for a House vote, said Thursday she would vote for Thompson’s bill – as a supplement to hers and not a replacement. A recent University of Texas study estimated Cohen’s $3 fee would raise between $16 million and $18 million annually, while Thompson’s 10 percent admissions tax would raise between $500,000 and $1.2 million. Thompson says that number is low, and that her bill would raise between $4 million and $6 million annually.

“What we need to do is make sure whatever we’re doing raises the most amount of money for the greatest amount of good,” Cohen said.

Rep. Cohen’s bill is HB2070, and it’s pending in the Ways and Means committee right now. I’m curious about the different financial projections given in these two accounts. There’s a huge gap between “$500,000 to $1.2 million” and “up to $8 million”, or even “$4 to 6 million”. Here’s one possible reason for the discrepancy:

Critics of the bill say topless clubs could simply circumvent the law by removing or reducing cover charges. And, they add, many adult bookstores do not charge an admission fee.

“House Bill 982 is a bill pushed by the strip club industry as a supposed compromise. It raises very little, if any, money,” said Torie Camp, deputy director of the Texas Association Against Sexual Assault.

Well, okay, but I suspect most strip clubs charge a cover fee to raise revenue for themselves, so it’s not clear to me how reducing or removing that fee in order to circumvent a tax would be good business for them. And the original bill didn’t include adult bookstores, so I don’t quite get the objection there, either. Be that as it may, this bill has passed the House while Cohen’s is still in committee, and at this point of the session, with so much more to be done, I think that has to be taken into account, because this may be all that can get done.

Bill filed to modify strip club fee

Got the following from State Rep. Ellen Cohen’s office:

State Representative Ellen Cohen filed House Bill 2070 today to reform the Adult Entertainment Fee she passed during the 80th Legislative Session in 2007.

“We have been successful in raising the money,” Cohen said. “The 1.9 million Texans who are victims of sexual assault could be greatly helped by the $11 million currently collected under this fee. This bill will move us closer to fully addressing sexual assault in Texas.”

Primarily, HB 2070 addresses constitutional concerns with two modifications from the original legislation. First, the new bill eliminates a spending provision that previously directed funds to indigent healthcare and will now dedicate all revenue collected to the Sexual Assault Program Fund 5010. Secondly, the fee assessed on certain sexually-oriented businesses would be lowered from $5 to $3 per patron.

Using all funds generated by the Adult Entertainment Fee directly for sexual assault programs will provide an estimated $18 million per year for the fund. This amount will allow for a comprehensive approach to address sexual assault issues in Texas, including research, prevention, response and sex offender management and treatment.

“In the end, the focus must remain on the victim survivors and providing them with the resources they need,” Cohen said. “As a Legislator, I will continue to work with members of both parties to bring support to those who need it most. I am confident that my fellow Legislators will, as always, vote with their districts in mind and support the thousands of women, children and men who are survivors of sexual assault.”

The original bill was declared unconstitutional by a Travis County court last March, on the grounds that it was a “content-based” tax that did not link the activity being taxed to the programs being funded. That ruling is under appeal by the state, but at the same time the proponents of the original legislation said they would file a bill to address that ruling. And so here we are.

Strip club fee back in court

You may recall that in the last legislative session, a bill (HB1751) was passed that imposed a $5 per customer fee on strip clubs, with the revenue going to a sex assault prevention fund, among other things. That fee was ruled unconstitutional by a Travis County judge in March. Now everyone involved is back in court for the first round of appeals.

In arguments before the state Third Court of Appeals, Texas Solicitor General James Ho said the government should be allowed to collect the fee in part because it can already regulate nude dancing as well as sales of alcohol.

The law specifically applies to strip clubs that sell alcohol. By putting those two elements together, “a small and modest fee should be permissible,” said Ho, the top appeals attorney for state Attorney General Greg Abbott.

The fee is not a tax on constitutionally protected free speech, Ho said.

“Remove the alcohol, remove the fee,” he said.

The Texas Entertainment Association, which represents strip clubs across the state, strenuously disagreed.

“It is a tax on speech,” said the group’s lawyer, Craig Enoch, a former Texas Supreme Court justice. He said the fee is only charged at bars and clubs that have nude dancing.

“This is a tax that is assessed if you are entertaining in the nude,” Enoch said.

The state’s argument that the sale of alcohol is the key component would open other First Amendment issues, Enoch said.

“If this statute is not a tax on speech, the state could tax the Catholic church because it serves alcohol at communion,” Enoch said.

I thought the strip clubs’ argument was weak the first time around, but they prevailed, so who knows. The one thing that is certain is that this will be in the courts for a lot longer, which is making some proponents of the law consider other options.

Annette Burrhus-Clay, executive director of [the Texas Association Against Sexual Assault], said the group will work with lawmakers during the current legislative session to draft a new bill that protects free speech and provides a dedicated source of money.

I’ll keep an eye out for that. A statement from Rep. Ellen Cohen, the sponsor of HB1751, is beneath the fold.

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