четверг, 21 июня 2012 г.

Lawsuits filed over tobacco tax bills


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Last week Ashland attorney Gregory M. Varner filed lawsuits in circuit court in both his home county of Clay and in Randolph County against the local legislative delegation's tobacco tax bills, The lawsuits are seeking judgments that Senate Bill 486 relating to Randolph County and Senate Bill 476 in Clay County are unconstitutional. Being sued in Randolph County are state Sen. Gerald Dial, Rep. Richard Laird, Rep. DuWayne Bridges, Dr. Marquita Davis, Alabama's director of finance, and Thomas L. Wright Jr., the state comptroller.

Varner filed the five-count lawsuit on behalf of the Randolph County Industrial Development Council, the Randolph County Water, Sewer, and Fire Protection Authority and as individuals: Hutch Hammond, Faye Sims Smith and Todd Freeman. He said there is some belief that only individuals have standing to sue. Freeman, Hammond and Smith are listed as Randolph County citizens and taxpayers. Davis and White are sued in their official capacities. Varner alleges SB 486 is unconstitutional, void and invalid and says plaintiffs want an injunction, both temporary and permanent, preventing the alteration and modification in distribution of Randolph County's tobacco tax receipts.

Ultimately Varner said the suits are designed to have each of the bills in each county set aside as unconstitutional. Additionally, with the redistricting of Clay there will be taxation without representation. Citizens will pay the tobacco tax to the District Community Service Grant Authority now controlled by Dial, Bridges and Laird but after redistricting takes effect the money will be controlled by people not representing Clay County. After 2014 parts of the county will be represented by another senator and two other representatives who are not members of the grant authority. Clay will no longer be in Laird's district and much of it will no longer be in Dial's district. "The reason we're bringing the suit is, number one, the bills were passed against the overwhelming objections of all the counties.

We're protecting the taxpayers' money and, in the words used by the governor, shutting down a slush fund that is unconstitutional," Varner said. The Randolph County Industrial Development Council is a plaintiff because when the bill becomes effective July 1 it restricts the council's authority to govern its own affairs and limits its use of funds, according to the complaint. It will cause imminent and irreparable damage to the two authorities (Water Authority and Industrial Development Council), terminating the expansion of planned water line extensions that would provide water to many rural communities and would include the likely termination of valuable and experienced staff at the RCIDC, the complaint alleges. The Water Authority says an average of $50,000 will be diverted annually from its operating budget due to this bill.

The complaint notes Gov. Robert Bentley vetoed SB 486, saying the bill does not appear to be adequately advertised as required by Alabama law. The Senate and House ultimately overrode the executive veto. Jeremy King, Deputy Communications Director in the governor's office, said, "Governor Bentley believes the bills are unconstitutional, and he has been very open about that view since the time of his veto. The fact that the Legislature overrode his veto would not change his opinion on the issue." Varner said during the governor's recent visit to Clay County a person in a group session thanked the governor for his veto and the governor referred to the the fund created by the bills as a slush fund and said they were unconstitutional. Varner asked the governor to join the lawsuit and he said he did not know if he could do that but he would look into it.

The industrial development council's funds from the tobacco tax can, as specified by the bill, only be expended for recruitment of new and existing industries and no more than 20 percent of the generated revenue can be spent on personnel and/or related to personnel. It restricts the discretion of the Industrial Development Council, forbidding the use of funds to work on broad-based economic development initiatives, such as workforce development and jobs training, the complaint says. The complaint states Dial altered the proposed legislation, which was not advertised as required after the changes. For example, the published notice created and funded a District Community Service Office with staff, equipment, etc. but that was deleted from the amended bill.

A District Community Service Grant Authority consisting of the three legislative delegation members was created to allocate funds. Also, the tobacco funds distribution was changed, as well as the effective date of SB 486. The complaint also alleges SB 486 is discriminatory because a tax levied in Randolph County can be used in other counties. David Meddick, chairman of the Randolph County Democratic Executive Committee, said the group is planning to meet and make a decision on whether to join this lawsuit or not. Chambers County discussed it in executive session Monday but has taken no action. Clay County Commissioner Roy Johnson and individuals Terry Meek, Mary Wood and Andrea Jackson filed suit in Clay County against the same people, but added Johnny McReynolds, chairman of the Alabama Forestry Commission, the Clay County Industrial Development Council and Citizens For The Welfare of Animals in Clay County as defendants. Their opposition is to Senate Bill 476.

The complaint also asks the defendants be enjoined from the allocation of funds as directed by SB 476. The legislation will divert about $117,000 from the Clay County Commission's operating budget. SB 476 will increase the percentage of Clay County Tobacco tax receipts from 32 percent to 35 percent going to the Forestry Commission. The Industrial Development Council amount is increasing under the new bill from 20 to 25 percent. Not a current recipient of funds, under this bill the Citizens for the Welfare of Animals in Clay County will receive 15 percent of the tobacco tax receipts. Complaints are similar except when SB 476 becomes effective $68,000 will be diverted annually from the Clay County Commission General Fund and $48,000 will be diverted from the commission's fund dedicated to water feeder lines. Services may be eliminated or reduced. Planned water line extensions may be terminated.

The complaint also noted the percentage set aside for the Community Service Grant Authority in all three counties: Clay County's SB 476 specifies 25 percent, or on average $60,000 annually; Randolph County's SB 486 specifies 10 percent, or $50,000 annually; and Chambers County's SB 487 specifies 18 percent, or approximately $90,000 annually. According to the census Clay County's population is 13,932; Randolph County's is 22,913 and Chambers County's is 34,215. Per capita, Clay County residents will pay $4.30, Randolph residents $2.18 and Chambers residents$2.63. The complaint alleges Clay County residents are paying more per capita to fund the grant authority. Dial and Laird did not immediately return telephone calls Tuesday requesting comments on the lawsuit. Previously, Dial had said if people want to waste their money filing suit it is their business. He said Attorney General Luther Strange will defend them.

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