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Wilson v. Rosenblum

Supreme Court of Oregon, En Banc

December 14, 2017

J. L. WILSON and Justen A. Rainey, Petitioners,
v.
Ellen F. ROSENBLUM, Attorney General, State of Oregon, Respondent. Mike FITZ Petitioner,
v.
Ellen F. ROSENBLUM, Attorney General, State of Oregon, Respondent.

         On petition to review ballot title fled September 11, 2017; considered and under advisement on November 16, 2017.

          Gregory A. Chaimov and Tim Cunningham, Davis Wright Tremaine LLP, Portland, fled the petition and reply memorandum on behalf of petitioners Wilson and Rainey.

          Nathan R. Rietmann, Rietmann & Rietmann, LLP, Salem, fled the reply memorandum on behalf of petitioner Fitz.

          Rolf C. Moan, Assistant Attorney General, Salem, fled the answering memorandum on behalf of respondent. Also on the answering memorandum were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

         The ballot title is referred to the Attorney General for modifcation.

          [362 Or. 227]

          LANDAU, J.

         Petitioners challenge the legal sufficiency of the Attorney General's certified ballot title for Initiative Petition 21 (2018). Our task in reviewing ballot title challenges is to determine whether the ballot title substantially complies with statutory requirements. See ORS 250.085(5) (stating standard of review). In this case, we conclude that, in two respects, the Attorney General's certified ballot title does not substantially comply with the law. We therefore refer it to the Attorney General for modification.

         Current Oregon law imposes a tax on the distri­bution of cigarettes and tobacco products in the state. ORS 323.030. The tax is collected from distributors before retail­ers purchase the products and sell them to consumers.

         In the case of cigarettes, the law requires distribu­tors to pay the tax at a rate specified in mills (thousandths of a dollar) per cigarette. Id. The Oregon Department of Revenue furnishes tax stamps to distributors as proof of payment of the tax. ORS 323.160. The tax stamps then must be affixed to each package of cigarettes before distribution. Id. Federal law requires cigarettes to be sold in packages of no fewer than 20, 21 CFR § 1140.16(b) (2010), and indeed cigarettes are commonly sold in packages, or "packs," of 20. The total tax rate for cigarettes currently is 66.5 mills per cigarette, or $1.33 per pack. ORS 323.030, ORS 323.031.

         In the case of cigars or other tobacco products, the tax is imposed differently. For cigars, the tax is 65 percent of the wholesale price, but it is capped at 50 cents per cigar. ORS 323.505(2)(a). For other tobacco products, the tax is either a similar percentage of the wholesale price or an amount by weight of the product. ORS 323.505(2)(b), (c).

         IP 21, if enacted, would alter the foregoing tax scheme in four ways. First, it would increase the tax on cig­arettes by 100 mills per cigarette, or $2.00 per pack. IP 21 §§ 1, 2. Second, it would eliminate the 50-cent cap on cigar taxes. Id. at § 4. Third, it would require that all moneys received from the new cigarette tax be first deposited with the state treasurer and, after the payment of any refunds for overpayments, be credited to the Public Health Account, "to [362 Or. 228] be used for the funding of local public health authorities in all areas of the state for public health programs." Id. at § 3. Fourth, certain sections of the measure-specifically, those amending the cigarette tax and the use of cigarette-tax revenues-would apply retroactively to the distribution of cigarettes and tobacco products on or after January 1, 2018. Id. at § 5.

         The Attorney General certified the following ballot title for IP 21:

"Increases cigarette tax; resulting revenue to fund public health programs; removes cap on cigar tax.
"Result of 'Yes' Vote: 'Yes' vote increases tax on ciga­rettes by 10 cents per cigarette; resulting revenue to fund public health programs. ...

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