On petition to review ballot title filed July 5, 2013; considered and under advisement August 23, 2013.
Aruna A. Masih, Bennett, Hartman, Morris & Kaplan LLP, Portland, filed the petition and reply for petitioners.
Rolf C. Moan, Assistant Attorney General, Salem, filed the answering memorandum for respondent. With him on the answering memorandum were Ellen F. Rosenblum, Attorney General, and Anna M. Joyce, Solicitor General.
Pursuant to ORS 250.085(2), petitioners seek review of the ballot title for Initiative Petition 12 (2014). Because we conclude that the ballot title does not substantially comply with ORS 250.035(2), we refer it to the Attorney General for modification.
The proposed measure provides, in part, that "[a]ll family giving is exempt from taxation." It defines "family giving" to include giving by voluntary act or by operation of law from one family member to another family member or trust. Current Oregon law does not impose a tax on gifts during a person's lifetime; it does impose a tax on property that is transferred as a result of a person's death. See ORS 118.010 and 118.160 (imposing state tax on transfers of property on death). However, that tax applies only to estates valued at more than $1 million. ORS 118.160(1)(c). Consequently, estates valued at less than $1 million would not be affected by Initiative Petition 12 (2014). The proposed measure would exempt estates valued at $1 million or more from existing estate or inheritance taxes if such estates are transferred from one family member to another family member or trust.
The Attorney General certified the following ballot title:
"Exempts from state, local taxation 'family giving' (defined) of any 'property' (defined), including by inheritance
"Result of 'Yes' Vote: 'Yes' vote exempts 'family giving' (defined) of 'property' (defined) -- including inheritance received from a 'family member' (defined) -- from state or local taxation; reduces state revenue.
"Result of 'No' Vote: 'No' vote retains law taxing certain estates and making those to whom estate property passes -- even if related to decedent -- liable for unpaid estate tax.
"Summary: Current law imposes one-time tax on estate of person who dies when value of estate -- as determined by federal law -- is $1 million or more; if estate does not pay tax, those to whom estate property passes are liable; does not otherwise tax property received as gifts or inheritance. Measure precludes state, local tax on property -- defined as including any legal or equitable interest in anything of value -- given from one 'family member' (defined) to another family member; includes property passed by will, inheritance, or other operation of law; exempts all 'family giving' (defined) from taxation. Measure does not prohibit or restrict ordinary property taxes imposed based on ownership of an interest in property. Measure reduces state revenues; provides no replacement. Other provisions."
Petitioners first object to the caption. A certified ballot title must contain a "caption of not more than 15 words that reasonably identifies the subject matter of the * * * measure." ORS 250.035(2)(a). Petitioners contend that the caption does not "reasonably identif[y] the subject matter" of the measure, because it does not explain its effect on current law. In particular, petitioners argue that the caption must make clear "the significant policy choice at the heart of the proposed measure's effect"; that is, the choice to exempt "family giving" from any estate or inheritance tax on estates of $1 million or more. For that proposition, petitioners cite this court's decisions discussing a similar measure -- Rasmussen v. Kroger, 351 Or 358, 266 P.3d 87 (2012) (Rasmussen I), and Rasmussen v. Kroger, 351 Or 542, 270 P.3d 250 (2012) (Rasmussen II) -- and ask that we require the Attorney General to certify for this measure the same ballot title that the Attorney General certified for that similar measure.
The similar measure to which petitioners refer is Initiative Petition 18 (2012). That measure would have enacted "a prohibition on the imposition of any state or local estate tax, inheritance tax, tax on property transferred in connection with a person's death, or tax on the transfer of property between 'family members' as the proposed measure define[d] that term." Rasmussen I, 351 Or at 360. The caption that the Attorney General initially certified stated:
"Prohibits estate and inheritance taxes, and any tax on property transfers between 'family ...