
 FILED:  October 4, 2001
IN THE SUPREME COURT OF THE STATE OF OREGON
TRICIA BOSAK
and JAMES SAGER,
Petitioners,
	v.
HARDY MYERS,
Attorney General, State of Oregon,
Respondent.
(SC S48606)
	On petition to review ballot title.
	Argued and submitted August 7, 2001.
	Paul B. Gamson of Smith, Gamson, Diamond & Olney, Portland,
filed the petition for petitioners.
	Erika L. Hadlock, Assistant Attorney General, Salem, argued
the cause for respondent.  With her on the answering memorandum
were Hardy Myers, Attorney General, and Michael D. Reynolds,
Solicitor General.
	Before Carson, Chief Justice, and Gillette, Durham, Leeson,
Riggs, and De Muniz, Justices.*
	RIGGS, J.
	Ballot title referred to the Attorney General for
modification.
	*Balmer, J., did not participate in the consideration or
decision of this case.
	RIGGS, J.
	This proceeding is brought under ORS 250.085(2) and
concerns the Attorney General's certified ballot title for a
proposed initiative measure, which the Secretary of State has
designated (per standard form) as Initiative Petition 49 (2002). 
Petitioners are electors who timely submitted written comments to
the Secretary of State concerning the content of the Attorney
General's draft ballot title and who therefore are entitled to
seek review in this court.  See ORS 250.085(2) (stating that
requirement).  In reviewing the Attorney General's certified
ballot title, we must determine whether it substantially complies
with the requirements of ORS 250.035(2).  See ORS 250.085(5)
(providing the standard of review).  
	The proposed initiative would amend the Oregon
Constitution by adding the following section:
	"Section 1.  For tax years beginning on or after July 1,
2003, the rate of growth of spending of state income tax
revenue shall not exceed four percent (4%) per year.  All
state income tax revenue collected by the state in excess of
the four percent allowed increase shall be returned to
taxpayers in proportion to the amount each taxpayer paid. 
Any refund required under this section shall be made not
later than 150 days after the end of the fiscal year in
which the excess revenue was collected.  For purposes of
this section, 'state income tax revenue' means revenue
collected by the imposition of the personal income tax, the
corporate income taxes, and corporate excise taxes."

	The Attorney General certified the following ballot
title for Initiative Petition 49:

"AMENDS CONSTITUTION: LIMITS ANNUAL INCOME-TAX REVENUE SPENDING GROWTH
TO FOUR PERCENT; RETURNS EXCESS
REVENUE TO TAXPAYERS
		"RESULT OF 'YES' VOTE:  'Yes' vote limits the annual
growth in spending of state income-tax revenue to four
percent; state must return all revenue exceeding limit to
taxpayers.
		"RESULT OF 'NO' VOTE:  'No' vote rejects four-percent
limit on annual growth in spending of state income-tax
revenue; rejects requiring state to return revenue exceeding
that limit.
		"SUMMARY:  Amends Oregon Constitution.  Oregon statutes
currently limit biennial growth of state appropriations for
general governmental purposes to previous biennium's growth
rate for personal income in Oregon.  Under Oregon
Constitution, the state currently must return excess income-
and excise-tax revenue to taxpayers when it collects at
least two percent more than it estimated it would collect. 
This measure adds constitutional provision limiting annual
rate of growth in spending of 'state income tax revenue'
(personal and corporate income taxes, corporate excise
taxes) to four percent; growth limit not adjusted for
population changes or inflation.  Measure requires state to
return to taxpayers all 'state income tax revenue' collected
in excess of growth limit.  Measure limits state spending of
income-tax revenues without providing replacement revenues. 
Other provisions."

		Petitioners Bosak and Sager challenge the caption, vote
result statements, and summary of the Attorney General's
certified ballot title on the ground that they mischaracterize
the proposal as one that limits "spending growth."  As to those
challenges, we conclude that petitioners' arguments are not well
taken.
		Petitioners raise an additional challenge to the
caption, claiming that the use of the word "excess" will prove
confusing to voters.  We agree with petitioners that the use of
the word "excess" in the caption does not comply substantially
with the requirements of ORS 250.035(2).  The word "excess" in
the caption is likely to lead voters to believe that, even if no
more than the permitted four-percent increase in state income tax
revenue is collected, the state will be obligated to return what
it does not spend.  The text of the measure demonstrates that
that is not the case; thus, the caption is not accurate.  Indeed,
the Attorney General has acknowledged that the phrase "returns
revenue exceeding limit" correctly describes the proposed
measure.  
		Having concluded that the caption likely would confuse
voters, and therefore does not comply substantially with
statutory requirements, we refer the ballot title to the Attorney
General for modification.  See ORS 250.085(8) (providing for
referral); Flanagan v. Myers, 332 Or 318, ___ P3d ___ (2001)
(determining that challenged ballot titles did not comply
substantially with statutory requirements and referring those
ballot titles to Attorney General for modification).  
		Finally, although the Attorney General asserts that it
is necessary to include the words "to taxpayers" in the caption,
we agree with petitioners that those words logically may be
inferred.  Because, under the proposed measure, taxpayers are the
parties from whom the revenue originally was gathered, it is
reasonable to assume that the revenue that exceeds the limit
shall be returned to them.
		 Ballot title referred to the Attorney General for
modification.
