Mar 23 - Court Affirms Bag Reduction Charge is Not Tax: LA Co Bag Ban Can Proceed


Submitted by Recycling News on March 23, 2012 - 14:01.

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The Los Angeles County Superior Court today denied a lawsuit by plastic bag manufacturers to block implementation of the County’s grocery bag reduction ordinance.

Since July 1, 2011, grocery stores in the unincorporated area of Los Angeles County have been prohibited from providing customers with single-use plastic grocery bags. Additionally, the County ordinance requires stores to charge consumers the average cost of providing paper bags, which the county set at 10 cents.

In October, South Carolina-based Hilex Poly, the nation’s largest producer of single-use plastic bags, filed suit in Los Angeles, claiming that the requirement to charge the cost of bags was a 'tax', and therefore its adoption by the County Board of Supervisors in December 2010 violated the requirements of Proposition 26.

Proposition 26 was the November 2010 voter-adopted initiative that requires any local ‘taxes’ to be adopted by a two-thirds vote of the electorate.

Superior Court Judge Chalfant ruled that the 10 cent charge was neither a 'general tax' imposed for governmental purposes nor a 'special tax' collected by the County for a specific purpose. Judge Chalfant opined:

“An unstated premise of Petitioner’s case is that a payment compelled by ordinances can be a tax where the government does not receive any portion of the money...While it is true that the Constitution does not expressly provide that a local government must receive a levy, charge or exaction in order for it to qualify as a tax, this is likely due to the fact that it is so obvious and unquestioned as to not be open to debate. As a general rule, taxes are imposed for revenue purpose.”

Additionally, Judge Chalfant found that the charge would be exempt under Prop 26. As he states, the 10 cent charge

“fits within Prop 26’s first exception to the definition of a tax: (1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government conferring the benefit or granting the privilege to the payor.”

In 2011, it’s estimated that the ordinance eliminated the distribution of more than 250 million bags in Los Angeles County.

This ruling is expected to bolster efforts currently underway in dozens of jurisdictions across the state to adopt similar ordinances. To date, ordinances to ban single-use plastic bags and require consumers to pay the cost of paper bags have now been adopted to cover 43 California jurisdictions.

This is the third time that the courts have rejected the plastic industry’s legal efforts to block implementation of a plastic bag reduction ordinance, including a 2011 State Supreme Court ruling. Hilex Poly is expected to appeal this latest defeat.

Read the tentative ruling adopted by Judge Chalfant on our website.