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Texas Holding $11.2 Million in Strip Club Fees

State controller holding money pending lawsuit result
Texas Holding $11.2 Million in Strip Club Fees
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Mar 16, 2009 11:00 AM PDT    Text size: 
AUSTIN, Texas — The state Comptroller's Office is holding $11.2 million in fees collected from strip club patrons pending the action of an appeals court.

A $5 fee for strip club patrons was passed into law in 2007, with the money collected to fund sexual assault services in 54 Texas counties and health insurance programs. Last year, a judge struck down the law, saying that topless dancing was protected as free speech and that the state couldn't show a link between strip clubs and inadequate health insurance. The state has appealed, and the appeals court has not yet ruled.

Though the Texas Comptroller's Office continues to collect the fee, only some topless clubs are paying it. Some clubs have argued that collecting the money while the bill is under consideration in court is unfair and affects their cash flow as the economy slows. The $11.2 million collected is lower than the $40 million that legislative analysts projected in the law's first year.

Rep. Ellen Cohen, who authored the original 2007 bill, is pushing a new version this year, which drops the charge to $3 and sends all proceeds to sexual assault programs. Lawyers for the clubs say they'll take it to court if it passes.

"We will continue to fight until they stop filing unconstitutional legislation," said Stewart Whitehead, an attorney for the Texas Entertainment Association, which represents topless clubs in Texas. "These changes don't get them around the fact that they are taxing constitutionally protected speech."

R.J. DeSilva, a spokesman for Texas Comptroller Susan Combs, said if the strip club fee is upheld in the courts, businesses that do not collect the fee will face financial penalties. If the fee is overturned, he said, all collected money will be returned to the clubs.

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