
Filed: December 11, 2003
IN THE SUPREME COURT OF THE STATE OF OREGON
BILL SIZEMORE,
Petitioner,
    v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
(SC S50833)
    En Banc 
    On petition to review ballot title.
    Submitted on the record November 18, 2003.
    Eric C. Winters, Portland, filed the petition for
petitioner.
    Erika L. Hadlock, Assistant Attorney General, Salem, filed
the answering memorandum for respondent.  With her on the
answering memorandum were Hardy Myers, Attorney General, and Mary
H. Williams, Solicitor General.
    PER CURIAM
    Ballot title certified.
    Balmer, J., dissented and filed an opinion in which
Gillette, J., joined.
         PER CURIAM
         In this ballot title review proceeding under ORS
250.085(2), petitioner contends that the Attorney General's
ballot title regarding Initiative Petition 71 (2004) does not
comply substantially with the requirements of ORS 250.035.  See
ORS 250.085(5) (describing that standard for judicial review of
ballot titles).  Initiative Petition 71, if adopted, would amend
the Oregon Constitution to require the legislature to impose "a
tax on gross receipts derived from or apportionable to businesses
in this state," and would direct revenues that the tax raises to
education.  The terms "gross receipts" and "business," among
other terms, are defined in the proposed measure.
         We have examined petitioner's contentions and conclude
that none is well taken.  An opinion explaining in detail the
basis for that conclusion would not benefit the public, the
parties, or the bar.  Accordingly, we certify to the Secretary of
State the ballot title that the Attorney General certified, the
text of which appears below.  See ORS 250.085(8) (requiring that
disposition).
"AMENDS CONSTITUTION: ESTABLISHES TAX
(UP TO 1.25%) 
ON
'GROSS RECEIPTS' (DEFINED);
DEDICATES REVENUES TO PUBLIC EDUCATION
"RESULT OF 'YES' VOTE: 'Yes' vote establishes tax
(up to 1.25%) on 'gross receipts' (defined) generated
through Oregon activities; dedicates revenues to public
education (preschool through higher education).
"RESULT OF 'NO' VOTE: 'No' vote rejects
establishing tax on 'gross receipts' generated in
Oregon to fund public education (preschool,
kindergarten through twelfth grade, community college,
and higher education).
"SUMMARY: Amends constitution.  Establishes tax on
'gross receipts' (defined as value received from sales,
compensation for services, stock/bond trades, interest,
dividends, discounts, royalties, rents, other fees)
generated through activities in Oregon.  Dedicates
revenues to public education (preschool, kindergarten
through twelfth grade, community college, higher
education).  Creates exemption from tax when gross
receipts are under $250,000.  Establishes tax rate
starting at 0.2% when gross receipts are between
$250,000 and $500,000; rate increases stepwise (0.5%,
0.75%, and 1.0% rates) to 1.25% when gross receipts
exceed $10 million.  Permits legislature to create
limited exemptions, deductions, credits.  Requires
legislature to establish cost-minimizing tax-administration methods.  Requires school districts,
other governmental units receiving revenues, to publish
budget summaries.  Other provisions."
         Ballot title certified.
BALMER, J., dissenting.
         I respectfully dissent.  The proposed measure would
direct the legislature to establish a tax on "gross receipts."  
In my view, the certified ballot title fails to comply
substantially with ORS 250.035(2), because the ballot title uses
the term "gross receipts" prominently, despite the proposed
measure's unusual and counterintuitive definition of that term. 
As a result, the ballot title fails adequately to inform the
reader of the nature of the proposed tax and the entities that
would pay that tax.  
         The Attorney General's ballot title caption provides,
in relevant part:  "* * * ESTABLISHES TAX (UP TO 1.25%) ON 'GROSS
RECEIPTS' (DEFINED) * * *."  The "yes" vote result statement
similarly refers to "'gross receipts' (defined)," and the "no"
vote result statement refers to "'gross receipts,'" omitting the
parenthetical word "defined."
         The problem is that, both to the average voter and to
the tax expert, the term "gross receipts" is associated with
revenues derived from business activity.  By way of contrast, few
voters contemplating a proposed tax measure would consider their
wages as employees to be "gross receipts" to them.  Moreover, the
term has a present meaning in Oregon law.  Oregon, by
legislation, has entered into the Multistate Tax Compact, which
includes a typical definition of a "gross receipts tax":
"'Gross receipts tax' means a tax, other than a sales
tax, which is imposed on or measured by the gross
volume of business, in terms of gross receipts or in
other terms, and in the determination of which no
deduction is allowed which would constitute the tax an
income tax."
ORS 305.655, Article II(6) (emphasis added).  In addition, Oregon
currently and specifically taxes the "gross receipts" of certain
businesses, including boxing and wrestling matches, ORS 463.310,
and broadcasting, ORS 314.680.  Neither the state nor individuals
view wages from employment as "gross receipts" for tax purposes
under existing law -- and they are correct. 
         In contrast to that existing understanding of the term
"gross receipts" as a basis for taxation, the proposed measure
defines "gross receipts" to include not only "gross receipts from
sales," but also, among other things, "compensation for rendition
of services," "gains realized from trading in stocks," and
"dividends."  In other words, the proposed measure reasonably can
be read to define "gross receipts" to include wages and most
other types of income that individuals receive.  Furthermore,
although the proposed measure states that the tax would be levied
on the "gross receipts" of "businesses," it nonetheless defines
"business" as including "all activities engaged in with the
object of gain, benefit or advantage to the taxpayer or to
another person or class, directly or indirectly."  Again, that
sweeping definition is unusual and counterintuitive and
reasonably can be read to include individuals in their capacity
as employees receiving wages. (1)
         The Attorney General argues that his use of quotation
marks around the term "gross receipts" in the caption and in the 
"yes" and "no" vote result statements, as well as the
parenthetical signal "(defined)" in the caption and in the "yes"
vote result statement, alert the reader to the fact that "gross
receipts" is a defined term in the proposed measure.  Moreover,
the Attorney General notes, the summary describes the term, using
much of the definition from the proposed measure.  
         I agree that the kinds of signals the Attorney General
has identified may help reduce confusion or misunderstanding,
because the alert reader, noting the use of quotation marks or
that the proposed measure defines a term, carefully can review
the ballot title summary or the proposed measure itself.  Here,
however, the definition of "gross receipts" in the proposed
measure differs from a layperson's likely understanding of the
term and, even more importantly, from the definition of that term
in existing Oregon tax law.  Yet the certified ballot title uses
the term, without textual qualification or definition other than
the signals described above, in the most prominent parts of the
ballot title.  Potential petition signers and voters deserve --
and the law directs that they receive -- more.  The Attorney
General's certified ballot title does not comply substantially
with statutory requirements.  I would refer it to the Attorney
General for modification.
         Gillette, J., joins in this dissenting opinion.


1.  In contrast to this proposed measure, two other
proposed measures that also would impose a "gross receipts" tax
provide a specific exemption for employees.  See Initiative
Petition 72 (2004), Section 23; Initiative Petition 74 (2004),
Section 23.  Because of that critical distinction, I joined in
this court's earlier determinations that the Attorney General's
use of the term "gross receipts" to describe the tax that those
measures would impose met the statutory ballot title
requirements.  See Sizemore v. Myers, ___ Or ___, ___ P3d ___
(2003) (order certifying ballot title for Initiative Petition
72); Sizemore v. Myers, ___ Or ___, ___ P3d ___ (2003) (order
certifying ballot title for Initiative Petition 74).
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