Case Name: Mark STENNETT, Appellant, v. The STATE of Texas, Appellee
Court: Texas Court of Criminal Appeals
Jurisdiction: Texas
Decision Date: 1996-10-16
Citations: 941 S.W.2d 914
Docket Number: No. 1013-95
Parties: Mark STENNETT, Appellant, v. The STATE of Texas, Appellee.
Judges: Before the court en banc.
Reporter: South Western Reporter Second Series
Volume: 941
Pages: 914–922

Head Matter:
Mark STENNETT, Appellant, v. The STATE of Texas, Appellee.
No. 1013-95.
Court of Criminal Appeals of Texas, En Banc.
Oct. 16, 1996.
Stanley Schneider, W. Troy McKinney, Tom Moran, Houston, for appellant.
Dan MeCrory, Asst. Dist. Atty., Houston, Matthew Paul, State’s Atty., Austin, for State.
Before the court en banc.

Opinion:
OPINION ON STATE'S PETITION FOR DISCRETIONARY REVIEW
MEYEKS, Judge.
After Mark Stennett was arrested for possession of marihuana, he received from the Texas Comptroller of Public Accounts a bill for taxes in the amount of $49,070.00. Evidently, it was the Comptroller's position that Stennett owed these taxes on account of his having purchased, acquired, imported, manufactured, or produced marihuana. See Tex. Tax Code § 159.101(a). The tax bill informed Stennett that his taxes were past due, that a late penalty had been assessed, and that further penalty and interest might be assessed if the taxes were not paid promptly. He was also notified of his right to a hearing in the event that he disagreed with the bill.
Stennett did not, however, request a hearing. Instead, he mailed the Comptroller a check in the amount of $100.00, drawn on his personal account, and marked it simply "Tax." He then filed an application for habeas corpus in the 248th District Court of Harris County, alleging that his payment of the tax barred further criminal prosecution for possession of marihuana under the Double Jeopardy Clause of the United States Constitution. See U.S. Const, amend. 5. An evidentiary hearing was held on this application, at which Stennett and the District Attorney each introduced a few paper exhibits. Both sides then rested without offering any further evidence or argument, and the trial judge denied relief without comment.
On appeal Stennett claimed that assessment of the tax constituted punishment for his illegal possession of the marihuana and that such punishment effectively barred the imposition of any further punishment for the same offense. The Fourteenth Court of Appeals rejected this argument, however, and we refused discretionary review. Stennett v. State, 905 S.W.2d 612 (Tex.App.—Houston [14th] 1993). Stennett then took his case to the United States Supreme Court, which summarily granted his petition for certiorari, vacated the judgment of the Fourteenth Court of Appeals, and remanded to that Court for reconsideration in light of Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994). Stennett v. Texas, 513 U.S. 922, 115 S.Ct. 307, 130 L.Ed.2d 271 (1994).
On remand the Fourteenth Court of Appeals, relying on Kurth Ranch reversed its earlier position, holding that further prosecution of Stennett under the Texas Controlled Substances Act for possession of marihuana was jeopardy barred by the Fifth Amendment because Stennett had already been punished for that offense by the imposition and partial collection of a tax on the marihuana he allegedly possessed. Stennett v. State, 905 S.W.2d 612 (Tex.App.—Houston [14th Dist.] 1995). We granted discretionary review because the Court of Appeals decision involves an important question of federal law, affecting the constitutionality of a Texas statute, which has not yet been settled by this Court. See Tex.E.App. Proc. 200(c)(2),(4).
In Kurth Ranch the United State Supreme Court found that a Montana tax on the possession of marihuana, similar in many respects to the tax assessed against Stennett in the instant cause, was a punishment for purposes of the constitutional prohibition against successive punishments for the same criminal offense. It happened this way. The defendants in Kurth Ranch were first prosecuted and convicted for criminal possession of or conspiracy to possess illegal drugs. The state of Montana then sought to collect from them a large sum of money as tax on the marihuana they had been convicted of possessing. The defendants contested this assessment in an administrative proceeding which was later stayed when they filed a petition in bankruptcy. The bankruptcy court declared the tax assessment to be jeopardy barred, and a federal district court affirmed its judgment, as did the Ninth Circuit Court of Appeals. On certiorari the United States Supreme Court agreed, holding that the Montana tax was
a second punishment within the contemplation of a constitutional protection that has deep roots in our history and jurisprudence, and therefore must be imposed during the first prosecution or not at all. The proceeding Montana initiated to collect a tax on the possession of drugs was the functional equivalent of a successive criminal prosecution that placed the Kurths in jeopardy for the same offense.
Kurth Ranch, 511 U.S. at 784, 114 S.Ct. at 1948, 128 L.Ed.2d at 782 (citations and internal quotation marks omitted).
That the Montana tax was a punishment became manifest to the Supreme Court when it considered several factors suggesting that the tax was not intended merely as a revenue-producing measure. In the first place, it was much higher than would be expected for a purely revenue tax and was plainly intended by the Montana legislature, at least in part, as a deterrent to the possession of marihuana. Furthermore, the duty to pay the tax was expressly conditioned upon commission of a criminal offense by the tax obli-gor and assessed against him only after his arrest and dispossession of the taxable property. Kurth Ranch, 511 U.S. at 780-83, 114 S.Ct. at 1946-48, 128 L.Ed.2d at 779-80.
Of course, the fact that a tax is imposed on illegal activity or that it is intended in part to discourage such activity does not alone make it a punishment for purposes of the Double Jeopardy Clause. Id. at 780-83, 114 S.Ct. at 1945-47, 128 L.Ed.2d at 778-79. But, when the only persons subject to the tax are those against whom criminal charges have already been brought and who no longer possess or otherwise exercise any control over the taxable contraband, a claim that imposition of the tax is not penal becomes constitutionally implausible, particularly if, as in Montana, the tax is remarkably high. Id. at 782-83, 114 S.Ct. at 1947-48, 128 L.Ed.2d at 780-81.
Many of these same considerations also apply to the Texas controlled substances tax and militate in favor of a conclusion that it, like the Montana tax, is a penalty for criminal conduct. As in Montana, the marihuana tax in Texas is high, nearly $100 an ounce, and is imposed only against those persons who possess or deal in marihuana or other controlled substances illegally. Tex. Tax Code § 159.101(b)(3). But, unlike Montana, Texas does not impose its tax only on those who have been arrested and charged with a criminal offense. Instead, the obligation to pay the tax arises when the taxable event occurs, whether or not that event has yet come to the attention of law enforcement agencies, let alone become the subject of a criminal prosecution. Tex. Tax Code § 159.101(c). Moreover, the Texas legislature has provided a means for those who owe taxes on controlled substances to pay their bills in confidence and thus satisfy their tax obligation without subjecting themselves to arrest or otherwise bringing upon themselves a criminal prosecution. Tex. Tax Code § 159.005. For these reasons, we might be inclined to find that the Texas system of controlled substances taxation, unlike the Montana scheme, is not a punishment, were it not for the fact that the Texas tax was plainly and undoubtedly intended to be a punishment by the legislature that enacted it.
As in the case of civil forfeitures and penalties which seem on their surface to be remedial and, therefore, not subject to con stitutional restrictions affecting criminal prosecutions, the threshold question in deciding whether a tax amounts to punishment for purposes of the Double Jeopardy Clause is whether it was actually intended to serve a revenue-producing purpose or was designed instead to punish persons for the commission of crimes. See United States v. Halper, 490 U.S. 435, 442-444, 109 S.Ct. 1892, 1898-1900, 104 L.Ed.2d 487 (1989); Helvering v. Mitchell, 303 U.S. 391, 398-405, 58 S.Ct. 630, 632-36, 82 L.Ed. 917 (1938). The legislative history of the tax statute here in question makes it clear that the Texas legislature actually meant this tax to serve only the latter purpose. A few examples, excerpted from relevant legislative records, adequately illustrate the point.
The threat of a tax levy large enough to wipe out any illegal profits should add to the deterrent value of a prison sentence and criminal fine for drug dealing. The tax would be due even if the dealer escaped criminal conviction on some technicality- This is a law-and-order bill, not a revenue bill.
House Research Organization bill analysis, H.B. 24, May 9,1989.
What this bill does is establish the . requirement of licensure and the payment of taxes with respect to illicit controlled substances and dangerous drugs and would offer another tool, if you would, to law enforcement in addition to the actual current criminal offenses.
Sen. McFarland, Senate Criminal Justice Committee Public Hearing, May 18, 1989.
It was not conceived of initially as a revenue bill. It has not worked out to be a revenue bill. It's basically a prosecutorial tool. The prosecutors get to use the state tax basically as yet another hammer when working with people that are arrested for various drug offenses. And ultimately the theory is it would be packaged up in a plea bargain. And that it would make it easier to work with individual defendants.
Testimony of Mark Weiss, Comptroller's Office, before the Senate Finance Committee, May 20,1989.
These comments are typical of those expressed publicly or officially by all sponsors and proponents of the tax bill, and are satisfactory evidence that the legislature intended the tax on marihuana and other controlled substances to serve as further punishment for criminal conduct already punishable by heavy fines and protracted incarceration under the Texas Penal Code. Tex. Gov't Code § 311.023(1-3). We therefore conclude, as did the Fourteenth Court of Appeals in this case, albeit for different reasons, that the Texas tax on controlled substances and marihuana is a punishment subject to the prohibition of the United States Constitution against imposing it in a separate proceeding from that in which other criminal punishments for the same offense are imposed. Accordingly, we affirm the judgment of the Fourteenth Court of Appeals.
WHITE, J., dissents.
. Section 159.101(a) also imposes a tax on the "possession" of marihuana. However, the notice of tax due sent by the Comptroller to Sten-nett conspicuously omitted to claim taxes on account of Stennett's possessing marihuana, and demanded only that he pay "tax on the purchase, acquisition, importation, manufacture or production of marihuana!.]" See Defendant's Exhibit 4.
. The record does not reflect whether the Comptroller ever cashed this check, although it is likely that he did because the check was offered into evidence by Stennett. See Defendant's Exhibit 5. We cannot confirm this hypothesis, however, as the appellate record contains a photocopy only of the front of the check.
.Because the exaction of $100 in marihuana tax from Stennett was not obtained as a result of any judicial or quasi-judicial proceeding, Stennett's double jeopardy claim necessarily presents a multiple punishment, not a successive prosecution, question. See North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969).