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May 05, 2015 02:00 AM

Bag makers sue Dallas over 5-cent fee

Gayle S. Putrich
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    An ordinance to tax plastic and paper bags in Dallas is the subject of a lawsuit filed May 1 by a group of bag manufacturers and recyclers.

    The suit, brought by Hilex Poly Co. LLC, Superbag Corp., Inteplast Group and Advanced Polybag Inc., alleges that the 5-cent-per-bag tax passed by the City Council in March 2014 violates the Texas Solid Waste Disposal Act.

    Section 361.0961 of the Texas Health and Safety Code says local governments cannot ban or restrict “the sale or use of a container or package” or asses fees or deposits on the sale of packaging. The lawsuit alleges that makes the bag ban illegal.

    When the Dallas ban was passed, then-State Attorney General Greg Abbott was already looking into whether bag bans or taxes were legal in the state. He eventually concluded that such ordinances were a violation of state law. No other action has been taken on the nine other existing bans or fees in the state. Abbott has since been elected governor of Texas.

    The lawsuit also says the ordinance “raises more revenue than is reasonably necessary to subsidize the city's efforts to ensure compliance with the ordinance” and that such a move has to be approved by voters. Also, while labeled a “fee,” it is in fact a tax, which Texas law says also has to have the approval of the voters, according to the lawsuit.

    Customers are harmed by the ordinance, the suit says, because of increased costs to them. Retailers are in turn also harmed, it says, due to customers choosing to shop elsewhere, where bags are free.

    Bag manufacturers and plaintiffs Superbag and API are based in Houston and Sugarland, Texas, respectively.

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