74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
SA to SB 3
LC 3909/SB 3-2
SENATE AMENDMENTS TO
SENATE BILL 3
By COMMITTEE ON FINANCE AND REVENUE
June 12
On page 1 of the printed bill, line 2, after 'ORS' delete the
rest of the line and insert '323.010, 323.015, 323.455, 323.500,
323.505, 323.625, 391.800, 414.025, 414.725,'.
In line 3, after the first semicolon insert 'repealing ORS
323.457;'.
On page 11, line 33, delete '(1)'.
In line 34, delete '15' and insert '15 (1)(a)'.
Delete lines 37 through 44.
In line 45, delete '(a)' and insert '(1)'.
On page 12, line 5, delete '; and' and insert a period.
In line 6, delete '(b) 95.082' and insert '(2) 72.34'.
Delete lines 8 through 39 and insert:
' (3) 18.54 percent shall be credited to the Oregon Health Plan
Fund established by ORS 414.109.
' (4) 3.04 percent shall be transferred to the Healthy Kids
Safety Net Fund established by section 21 of this 2007 Act.
' (5) 1.16 percent shall be transferred to the Rural Health
Care Revolving Account established by ORS 442.480 for the
purposes described in section 34 of this 2007 Act.
' { + SECTION 24. + } Section 23 of this 2007 Act is amended
to read:
' { + Sec. 23. + }All moneys received by the Department of
Revenue from the taxes imposed under section 15 (1)(a), Article
IX of the Oregon Constitution, shall be paid over to the State
Treasurer to be held in a suspense account established under ORS
293.445. After the payment of refunds:
' (1) { - 4.918 - } { + 10 + } percent shall be credited to
the Tobacco Use Reduction Account established under ORS 431.832
to fund cigarette and tobacco use prevention and education
programs recommended in the Best Practices for Comprehensive
Tobacco Control Programs published by the United States
Department of Health and Human Services, Centers for Disease
Control and Prevention, National Center for Chronic Disease
Prevention and Health Promotion, Office on Smoking and Health,
August 1999.
' (2) { - 72.34 - } { + 68.47 + } percent shall be credited
to the Oregon Healthy Kids Program Fund established by section 15
of this 2007 Act.
' (3) { - 18.54 - } { + 17.55 + } percent shall be credited
to the Oregon Health Plan Fund established by ORS 414.109.
' (4) { - 3.04 - } { + 2.88 + } percent shall be
transferred to the Healthy Kids Safety Net Fund established by
section 21 of this 2007 Act.
' (5) { - 1.16 - } { + 1.10 + } percent shall be
transferred to the Rural Health Care Revolving Account
established by ORS 442.480 for the purposes described in section
34 of this 2007 Act.'.
Delete line 45.
On page 13, delete lines 1 through 33.
In line 34, delete '28' and insert '27'.
In line 37, after '(1)' insert 'and 323.031 (1)'.
In line 39, delete '37.931' and insert '21.69'.
In line 40, delete '3.45' and insert '2.3'.
In line 41, delete '3.45' and insert '2.3' and after ' state'
insert a semicolon and restore 'and' and delete the semicolon.
In line 42, delete '3.45' and insert '2.3'.
In line 44, restore the period and delete the semicolon.
Delete line 45 and insert:
' (2) After the appropriation and crediting of moneys to the
General Fund, cities, counties and the Department of
Transportation under subsection (1) of this section, of the
balance of the moneys in the suspense account, 71.41 percent
shall be credited to the Oregon Health Plan Fund established by
ORS 414.109 for the purpose of funding the maintenance and
expansion of the number of persons eligible for medical
assistance under the Oregon Health Plan or for funding the
maintenance of the benefits available under the Oregon Health
Plan, or both.'.
On page 14, delete lines 1 through 4.
In line 5, delete '(2)' and insert '(3)'.
In line 11, delete '(3)' and insert '(4)'.
Delete lines 20 through 45.
On page 15, delete lines 1 through 23.
After line 23, insert:
' { + SECTION 28. + } { + The unexpended balances of amounts
in the suspense account described in ORS 323.457 on December 31,
2007, are transferred to the suspense account described in ORS
323.455 for distribution as prescribed in ORS 323.455. + } ' .
In line 24, delete '31' and insert '29'.
In line 28, delete '15' and insert '15 (1)(a) and (b)'.
On page 16, line 4, delete '32' and insert '30' and delete '31'
and insert '29'.
After line 6, insert:
' { + SECTION 31. + } { + All moneys received by the
Department of Revenue under section 15 (1)(b) and (c), Article IX
of the Oregon Constitution, shall be deposited in the State
Treasury and credited to a suspense account established under ORS
293.445. After payment of refunds or credits arising from
erroneous overpayments, the balance of the moneys shall be
credited to the General Fund. Of the amount credited to the
General Fund under this section:
' (1) 44.6 percent shall be dedicated to funding the
maintenance and expansion of the number of persons eligible for
medical assistance under the Oregon Health Plan or to funding the
maintenance of the benefits available under the Oregon Health
Plan, or both; and
' (2) 55.4 percent shall be credited to the Tobacco Use
Reduction Account established under ORS 431.832. + }
' { + SECTION 32. + } Section 31 of this 2007 Act is amended
to read:
' { + Sec. 32. + } All moneys received by the Department of
Revenue under section 15 (1)(b) and (c), Article IX of the Oregon
Constitution, shall be deposited in the State Treasury and
credited to a suspense account established under ORS 293.445.
After payment of refunds or credits arising from erroneous
overpayments, the balance of the moneys shall be credited to the
General Fund. Of the amount credited to the General Fund under
this section:
' (1) { - 44.6 - } { + 57 + } percent shall be dedicated to
funding the maintenance and expansion of the number of persons
eligible for medical assistance under the Oregon Health Plan or
to funding the maintenance of the benefits available under the
Oregon Health Plan, or both; and
' (2) { - 55.4 - } { + 43 + } percent shall be credited to
the Tobacco Use Reduction Account established under ORS 431.832.
' { + SECTION 33. + } ORS 323.010 is amended to read:
' 323.010. As used in ORS 323.005 to 323.482, unless the
context requires otherwise:
' (1) 'Cigarette' means any product that contains nicotine, is
intended to be burned or heated under ordinary conditions of use
and consists of or contains:
' (a) Any roll of tobacco wrapped in paper or in any substance
not containing tobacco;
' (b) Tobacco, in any form, that is functional in the product
and that, because of its appearance, the type of tobacco used in
the filler or its packaging and labeling, is likely to be offered
to, or purchased by, consumers as a cigarette; or
' (c) Any roll of tobacco that is wrapped in any substance
containing tobacco and that, because of its appearance, the type
of tobacco used in the filler or its packaging and labeling, is
likely to be offered to, or purchased by, consumers as a
cigarette described in paragraph (a) of this subsection.
' (2) 'Cigarette activity in this state':
' (a) Means importing, storing or manufacturing cigarettes in
this state, or exporting cigarettes out of this state, in order
to sell the cigarettes either within or outside this state.
' (b) Does not include importing, storing, manufacturing or
exporting of cigarettes that are to be consumed by the person
doing the importing, storing, manufacturing or exporting.
' (3) 'Contraband cigarettes' means cigarettes or packages of
cigarettes:
' (a) That do not comply with the requirements of ORS 323.005
to 323.482 or 323.856 or the cigarette tax laws of another state
or the federal government;
' (b) That bear trademarks that are counterfeit under ORS
647.135 or other state or federal trademark laws; or
' (c) That have been sold, offered for sale or possessed for
sale in this state in violation of ORS 180.440.
' (4) 'Department' means the Department of Revenue.
' (5) 'Dealer' includes every person, other than a manufacturer
or a person holding a distributor's license, who engages in this
state in the sale of cigarettes.
' (6) 'Exporting' means the act of carrying or conveying goods
from a point of manufacture or storage in this state to a
location outside this state and may be further defined by the
department by rule.
' (7) 'Importing' means the act of bringing goods to a point of
storage in this state from a location outside this state and may
be further defined by the department by rule.
' (8) 'In this state' means within the exterior limits of the
State of Oregon and includes all territory within these limits
owned by or ceded to the United States of America.
' (9) 'Manufacturer' means any person who makes, manufactures
or fabricates cigarettes for sale.
' (10) 'Package' means the individual package, box or other
container in which retail sales or gifts of cigarettes are
normally made or intended to be made.
' (11) 'Person' includes any individual, firm, copartnership,
joint venture, association, social club, fraternal organization,
corporation, estate, trust, receiver, trustee, syndicate, this
state, any county, municipality, district or other political
subdivision of the state, or any other group or combination
acting as a unit.
' (12) 'Sale' includes any transfer of title or possession for
a consideration, exchange or barter, in any manner or by any
means whatsoever, but does not include the sale of cigarettes by
a manufacturer to a distributor.
' (13) 'Taxpayer' means a distributor or other person required
to pay a tax under ORS 323.005 to 323.482 { + or under section
15, Article IX of the Oregon Constitution + }, and includes a
distributor required to prepay a tax under ORS 323.068.
' (14) 'Transporter' means any person importing or transporting
into this state, or transporting in this state, cigarettes
obtained from a source located outside this state, or from any
person not licensed as a distributor under ORS 323.005 to
323.482. It does not include a licensed distributor, a common
carrier to whom is issued a certificate or permit by the United
States Surface Transportation Board to carry commodities in
interstate commerce, or to a carrier of federal tax-free
cigarettes in bond, or any person transporting no more than 199
cigarettes at any one time.
' (15) 'Untaxed cigarette' means any cigarette that has not yet
been distributed in such manner as to result in a tax liability
under ORS 323.005 to 323.482 { + or under section 15, Article IX
of the Oregon Constitution + }.
' (16) 'Use or consumption' includes the exercise of any right
or power over cigarettes incident to the ownership thereof, other
than the sale of the cigarettes or the keeping or retention
thereof for the purpose of sale.
' (17) 'Wholesaler' means any dealer who engages in the sale of
cigarettes to any other dealer for purposes other than use or
consumption.
' { + SECTION 34. + } ORS 323.015 is amended to read:
' 323.015. As used in ORS 323.005 to { - 323.482 - }
{ + 323.645 + }, unless the context requires otherwise:
' (1) 'Distribution' includes:
' (a) The sale in this state of untaxed cigarettes.
' (b) The use or consumption in this state of untaxed
cigarettes.
' (c) The receipt or retention in this state of untaxed
cigarettes at a place of business where cigarettes are
customarily sold or offered for sale to consumers.
' (d) The placing of cigarettes in vending machines in this
state.
' (e) The use or consumption by the first person in possession
in this state of untaxed cigarettes transported to the state in
quantities of more than 199 in a single shipment.
' (f) Donations of sample cigarettes or gift cartons by the
manufacturers of the cigarettes, except sample packages
containing not more than five cigarettes and labeled as 'sample,'
'not for sale' or with similar wording.
' (g) The possession in this state of untaxed cigarettes that
were transported to this state in quantities of more than 199,
unless the person in possession of the untaxed cigarettes is in
possession of the untaxed cigarettes in order to transport the
cigarettes to a location outside this state.
' (2) 'Distributor' includes:
' (a) Any person who distributes cigarettes.
' (b) Any person who sells or accepts orders for cigarettes
that are to be transported from a point outside this state to a
consumer within this state.
' (c) Notwithstanding the provisions of ORS 323.010 (5), any
dealer who serves as the dealer's own distributor or who buys
directly from a manufacturer for resale in this state shall be
deemed to be both a distributor and a dealer under ORS 323.005 to
323.482 { + or under section 15, Article IX of the Oregon
Constitution + }.
' (3) 'Distributor engaged in business in this state ' includes
any of the following:
' (a) Any distributor maintaining, occupying or using,
permanently or temporarily, directly or indirectly, or through a
subsidiary or agent, by whatever name called, an office, place of
distribution, sales or sample room or place, warehouse or storage
place or any other place of business.
' (b) A distributor having a representative, agent,
salesperson, canvasser or solicitor operating in this state under
the authority of the distributor or its subsidiary for the
purpose of selling, delivering, or the taking of orders for
cigarettes.
' { + SECTION 35. + } ORS 323.500 is amended to read:
' 323.500. As used in ORS 323.500 to 323.645, unless the
context otherwise requires:
' (1) 'Business' means any trade, occupation, activity or
enterprise engaged in for the purpose of selling or distributing
tobacco products in this state.
' (2) 'Cigar' means a roll for smoking that is of any size or
shape and that is made wholly or in part of tobacco, irrespective
of whether the tobacco is pure or flavored, adulterated or mixed
with any other ingredient, if the roll has a wrapper made wholly
or in greater part of tobacco and if 1,000 of these rolls
collectively weigh more than three pounds. 'Cigar' does not
include a cigarette, as defined in ORS 323.010.
' (3) 'Consumer' means any person who purchases tobacco
products in this state for the person's use or consumption or for
any purpose other than for reselling the tobacco products to
another person.
' (4) 'Contraband tobacco products' means tobacco products or
packages containing tobacco products:
' (a) That do not comply with the requirements of ORS 323.500
to 323.645;
' (b) That do not comply with the requirements of the tobacco
products tax laws of the federal government or of other states;
or
' (c) That bear trademarks that are counterfeit under ORS
647.135 or other state or federal trademark laws.
' (5) 'Department' means the Department of Revenue.
' (6) 'Distribute' means:
' (a) Bringing, or causing to be brought, into this state from
without this state tobacco products for sale, storage, use or
consumption;
' (b) Making, manufacturing or fabricating tobacco products in
this state for sale, storage, use or consumption in this state;
' (c) Shipping or transporting tobacco products to retail
dealers in this state, to be sold, stored, used or consumed by
those retail dealers;
' (d) Storing untaxed tobacco products in this state that are
intended to be for sale, use or consumption in this state;
' (e) Selling untaxed tobacco products in this state; or
' (f) As a consumer, being in possession of untaxed tobacco
products in this state.
' (7) 'Distributor' means:
' (a) Any person engaged in the business of selling tobacco
products in this state who brings, or causes to be brought, into
this state from without the state any tobacco products for sale;
' (b) Any person who makes, manufactures or fabricates tobacco
products in this state for sale in this state;
' (c) Any person engaged in the business of selling tobacco
products without this state who ships or transports tobacco
products to retail dealers in this state, to be sold by those
retail dealers;
' (d) Any person, including a retail dealer, who sells untaxed
tobacco products in this state; or
' (e) A consumer in possession of untaxed tobacco products in
this state.
' (8) 'Manufacturer' means a person who manufactures tobacco
products for sale.
' (9) 'Place of business' means any place where tobacco
products are sold or where tobacco products are manufactured,
stored or kept for the purpose of sale or consumption, including
any vessel, vehicle, airplane, train or vending machine.
' (10) 'Retail dealer' means any person who is engaged in the
business of selling or otherwise dispensing tobacco products to
consumers. The term also includes the operators of or recipients
of revenue from all places such as smoke shops, cigar stores and
vending machines, where tobacco products are made or stored for
ultimate sale to consumers.
' (11) 'Sale' means any transfer, exchange or barter, in any
manner or by any means, for a consideration, and includes and
means all sales made by any person. It includes a gift by a
person engaged in the business of selling tobacco products, for
advertising, as a means of evading the provisions of ORS 323.500
to 323.645, or for any other purpose.
' (12) 'Taxpayer' includes a distributor or other person
required to pay a tax imposed under ORS 323.500 to 323.645
{ + or under section 15, Article IX of the Oregon
Constitution + }.
' (13) 'Tobacco products' means cigars, cheroots, stogies,
periques, granulated, plug cut, crimp cut, ready rubbed and other
smoking tobacco, snuff, snuff flour, cavendish, plug and twist
tobacco, fine-cut and other chewing tobaccos, shorts, refuse
scraps, clippings, cuttings and sweepings of tobacco and other
kinds and forms of tobacco, prepared in such manner as to be
suitable for chewing or smoking in a pipe or otherwise, or both
for chewing and smoking, but shall not include cigarettes as
defined in ORS 323.010.
' (14) 'Untaxed tobacco products' means tobacco products for
which the tax required under ORS 323.500 to 323.645 { + or under
section 15, Article IX of the Oregon Constitution, + } has not
been paid.
' (15) 'Wholesale sales price' means the price paid for untaxed
tobacco products to or on behalf of a seller by a purchaser of
the untaxed tobacco products.
' { + SECTION 36. + } ORS 323.625, as amended by section 53a,
chapter 804, Oregon Laws 2003, is amended to read:
' 323.625. All moneys received by the Department of Revenue
under ORS 323.500 to 323.645 shall be deposited in the State
Treasury and credited to a suspense account established under ORS
293.445. After payment of refunds or credits arising from
erroneous overpayments, the balance of the money shall be
credited to the General Fund. Of the amount credited to the
General Fund under this section { - 41.54 - } { + 21.3 + }
percent shall be dedicated to funding the maintenance and
expansion of the number of persons eligible for medical
assistance under the Oregon Health Plan, or to funding the
maintenance of the benefits available under the Oregon Health
Plan, or both { - , and 4.62 percent shall be credited to the
Tobacco Use Reduction Account established under ORS 431.832 - } .
' { + SECTION 36a. + } ORS 391.800 is amended to read:
' 391.800. (1) There is established in the State Treasury,
separate and distinct from the General Fund, the Elderly and
Disabled Special Transportation Fund. All moneys in the Elderly
and Disabled Special Transportation Fund are appropriated
continuously to the Department of Transportation for payment of
the department's administrative costs of the program and payment
to mass transit districts, transportation districts, Indian
tribes and counties as provided in ORS 391.810.
' (2) The Elderly and Disabled Special Transportation Fund
shall consist of:
' (a) Moneys transferred to the fund under ORS 184.642 and
323.455 { - (3) - } { + (4) + };
' (b) Other moneys appropriated to the fund by the Legislative
Assembly; and
' (c) Moneys obtained from interest earned on the investment of
moneys in the fund.
' (3) Moneys in the Elderly and Disabled Special Transportation
Fund, with the approval of the State Treasurer, may be invested
as provided by ORS 293.701 to 293.820, and the earnings from the
investments shall be credited to the Elderly and Disabled Special
Transportation Fund.
' { + SECTION 37. + } { + Section 38 of this 2007 Act is
added to and made a part of ORS 323.005 to 323.482. + }
' { + SECTION 38. + } { + (1) The taxes imposed on the
distribution of cigarettes under section 15, Article IX of the
Oregon Constitution, are subject to administration, collection
and enforcement as are taxes imposed or made due under ORS
323.005 to 323.482.
' (2) The taxes imposed on the distribution of cigarettes under
section 15, Article IX of the Oregon Constitution, shall not
apply to the distribution of cigarettes in any instance in which
cigarettes are made exempt from taxes imposed or made due under
ORS 323.005 to 323.482 as of the effective date of section 15,
Article IX of the Oregon Constitution. + }
' { + SECTION 39. + } { + Section 40 of this 2007 Act is
added to and made a part of ORS 323.500 to 323.645. + }
' { + SECTION 40. + } { + (1) The taxes imposed on the
distribution of cigars and other tobacco products under section
15, Article IX of the Oregon Constitution, are subject to
administration, collection and enforcement as are taxes imposed
or made due under ORS 323.500 to 323.645.
' (2) The taxes imposed on the distribution of cigars and other
tobacco products under section 15, Article IX of the Oregon
Constitution shall not apply to the distribution of cigars and
other tobacco products in any instance in which cigars and other
tobacco products are made exempt from taxes imposed or made due
under ORS 323.500 to 323.645 as of the effective date of section
15, Article IX of the Oregon Constitution. + }
' { + SECTION 41. + } { + (1) Notwithstanding ORS 323.030
(3) and in addition to and not in lieu of any other tax, the tax
imposed by section 15 (1)(a), Article IX of the Oregon
Constitution, as applied in section 15 (6)(b), Article IX of the
Oregon Constitution, on cigarettes that are in this state and in
the possession of a distributor as of January 1, 2008, shall be
determined and collected as provided in this section and section
42 of this 2007 Act.
' (2) The tax is due and payable on or before 20 days after the
first day of the calendar month following the effective date of
section 15, Article IX of the Oregon Constitution. Any amount of
tax that is not paid within the time required shall bear interest
at the rate established under ORS 305.220 per month, or fraction
of a month, from the date on which the tax is due to be paid,
until paid.
' (3) On or before 20 days after the first day of the calendar
month following the effective date of section 15, Article IX of
the Oregon Constitution, every dealer must file a report with the
Department of Revenue in such form as the department may
prescribe. The report must state the number of cigarettes in the
possession of or under the control of the dealer in this state at
12:01 a.m. on the first day of the calendar month following the
effective date of section 15, Article IX of the Oregon
Constitution, and the amount of tax due. Each report must be
accompanied by a remittance payable to the department for the
amount of tax due. + }
' { + SECTION 42. + } { + (1) Every distributor must take an
inventory as of 12:01 a.m. on the first day of the calendar month
following the effective date of section 15, Article IX of the
Oregon Constitution, of all packages of cigarettes to which are
affixed Oregon cigarette tax stamps and of all unaffixed Oregon
cigarette tax stamps in the possession of or under the control of
the distributor.
' (2) Every distributor must file a report with the Department
of Revenue on or before 20 days after the first day of the
calendar month following the effective date of section 15,
Article IX of the Oregon Constitution, in such form as the
department may prescribe, showing:
' (a) The number of Oregon cigarette tax stamps, with the
designations of the stamps, that were affixed to packages of
cigarettes in the possession of or under the control of the
distributor at 12:01 a.m. on the first day of the calendar month
following the effective date of section 15, Article IX of the
Oregon Constitution.
' (b) The number of unaffixed Oregon cigarette tax stamps, with
the designations of the stamps, that were in the possession of or
under the control of the distributor at 12:01 a.m. on the first
day of the calendar month following the effective date of section
15, Article IX of the Oregon Constitution.
' (3) The amount of tax required to be paid with respect to the
affixed Oregon cigarette tax stamps shall be determined in
accordance with section 15 (1)(a), Article IX of the Oregon
Constitution, as applied by section 15 (6)(b), Article IX of the
Oregon Constitution, and remitted with the distributor's report.
Any amount of tax not paid within the time specified for the
filing of the report shall bear interest at the rate established
under ORS 305.220 per month, or fraction of a month, from the due
date of the report until paid.
' (4) Notwithstanding ORS 323.320, the department may establish
a date after which the value of stamps sold prior to the
effective date of section 15, Article IX of the Oregon
Constitution, will not be refunded or credited to a
distributor. + } ' .
In line 7, delete '33' and insert '43' and delete '34 ' and
insert '44'.
In line 9, delete '34' and insert '44'.
In line 25, delete '35' and insert '45'.
After line 39, insert:
' { + SECTION 46. + } { + Sections 2, 3, 8, 9, 10, 11, 13,
16 and 22 of this 2007 Act and the amendments to ORS 414.025,
414.725, 414.839, 735.701, 735.710 and 735.754 by sections 4, 5,
6, 17, 18, 19 and 20 of this 2007 Act become operative on July 1,
2008. + }
' { + SECTION 47. + } { + The amendments to ORS 323.455 and
323.625 by sections 27 and 36 of this 2007 Act becomes operative
on January 1, 2008. + }
' { + SECTION 48. + } { + Section 32 of this 2007 Act
becomes operative on July 1, 2009. + }
' { + SECTION 49. + } { + ORS 323.457 is repealed on January
1, 2008. + } ' .
In line 43, delete '36' and insert '50'.
On page 17, line 3, delete '37' and insert '51'.
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