Court Opinion

ID: 835690
Source: CourtListenerOpinion
Date Created: 2013-03-01 21:11:56.255791+00
Date Added: 2024-06-11T12:42:07.270745
License: Public Domain

FILED:  January 26, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
LARRY WOLF,
GAIL RASMUSSEN and CHRISTINA COUGHLIN,
Petitioners,
v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
(SC S52883)
En Banc
On petition to review ballot title.
Submitted on the record January 5, 2006.
Margaret S. Olney, Smith, Diamond & Olney, Portland, filed
the petition and the reply memorandum for petitioners.
Laura Anderson, Assistant Attorney General, Salem, filed the
answering memorandum for respondent.  With her on the answering
memorandum was Hardy Myers, Attorney General.
BALMER, J.
Ballot title referred to Attorney General for modification.
BALMER, J.
This ballot title review proceeding, brought under ORS
250.085(2), concerns the Attorney General's certified ballot
title for a proposed initiative measure that the Secretary of
State has denominated as Initiative Petition 67 (2006).  The
proposed measure, if adopted, would require certain corporations
described in the measure to disclose tax-related information to
the Secretary of State, who would make that information available
as a public record.  Petitioners are electors who timely
submitted written comments to the Secretary of State concerning
the Attorney General's draft ballot title and who are entitled,
therefore, to seek review of the resulting certified ballot title
in this court.  See ORS 250.085(2) (stating that requirement). 
We review the Attorney General's certified ballot title to
determine whether it substantially complies with the requirements
of ORS 250.035(2).  ORS 250.085(5).  For the reasons that follow,
we conclude that it does not, and we therefore refer the ballot
title to the Attorney General for modification.
The proposed measure is set out in its entirety in the
Appendix, and we briefly describe its substantive provisions
here.  The proposed measure would require certain corporations
doing business in Oregon to submit an annual statement to the
Secretary of State that contains financial information, including
the corporation's federal taxable income, its Oregon tax
liability, the assessed value of its real and personal property
located in Oregon, and the apportionment of its taxes between
Oregon and other jurisdictions.  The Secretary of State would be
required to maintain the statement as a public record and make it
available on the Internet.  The filing requirement would apply to
all publicly traded corporations, financial corporations and
insurers as defined in ORS 317.010, and corporations with more
than 50 full-time employees or sales in excess of $10 million
with the exception of personal service corporations.
The Attorney General certified the following ballot
title:

"REQUIRES SPECIFIED BUSINESSES TO REPORT
CONFIDENTIAL BUSINESS INFORMATION TO STATE FOR PUBLIC
AND INTERNET DISCLOSURE
"RESULT OF 'YES' VOTE:  'Yes' vote requires
specified businesses to compile and report currently
confidential business information to Secretary of State
for Internet publication and public inspection.
"RESULT OF 'NO' VOTE:  'No' vote rejects
requirement that specified businesses compile and
report confidential business information to Secretary
of State; maintains current laws prohibiting disclosure
of such information.
"SUMMARY:  Current Oregon law prohibits disclosure
of some income and property tax documents and
information.  Measure requires that designated
businesses compile business information, including
Oregon-apportioned income, expenses, and property;
federal and Oregon taxable income; and Oregon income,
excise, and property tax liability, and file that
information with the Secretary of State for publication
on the Internet and public access.  Measure applies to
corporations with more than fifty full-time employees
or sales over $10,000,000 in past tax year, financial
corporations, insurers, and publicly-traded
corporations regardless of size; exempts 'personal
service corporations' but does not define term. 
Measure requires Secretary to develop oversight and
enforcement system; maintains limits on Department of
Revenue's disclosure of information, and imposes
deadline for filing statements.  Other provisions."

Petitioners challenge each part of the certified ballot
title although, as we describe below, their primary objection is
to the Attorney General's use of the phrase "confidential
business information" in the caption and the "yes" and "no" vote
result statements.
ORS 250.035(2)(a) requires that the caption of a ballot
title contain a statement of not more than 15 words "that
reasonably identifies the subject matter of the state measure." 
The caption is the "cornerstone for the other portions of the
ballot title" and must identify the proposed measure's subject
matter in terms that will not "confuse or mislead potential
petition signers and voters."  Mabon v. Myers, 332 Or 633, 33 P3d
988 (2001).  
Petitioners first argue that the phrase "confidential
business information" is misleading and inaccurate and that the
caption therefore fails to identify the subject matter of the
proposed measure.  In petitioners' view, the word "confidential"
confusingly implies that the information requested is information
to which no one other than the business or its employees ever is
privy.  Therefore, petitioners contend that the phrase
"confidential business information" is likely to mislead voters
to believe that the measure forces the disclosure of trade
secrets and other proprietary information, not the tax
information that the proposed measure actually requests.  A
proper caption, petitioners state, would refer directly to the
tax-related information that the proposed measure would require
businesses to disclose. 
The Attorney General responds that the word
"confidential" is appropriate because the essential subject of
the measure is the disclosure of information, most of which would
not have been subject to mandatory public disclosure absent the
measure.  The Attorney General also contends that the use of the
word "confidential" is appropriate because the Oregon Public
Records Law uses it in a similar context:  ORS 192.502 exempts
from disclosure as a public record "[i]nformation submitted to a
public body in confidence and not otherwise required by law to be
submitted, where such information should reasonably be considered
confidential" and "[p]ublic records or information the disclosure
of which is prohibited or restricted or otherwise made 
confidential or privileged under Oregon law."  ORS 192.504(4),
(9) (emphasis added).
We agree with petitioners.  The problem with the
Attorney General's caption is twofold:  The use of the phrase
"confidential business information" is inaccurate, and the
caption simply fails to "reasonably identif[y]" the "subject of
the measure," ORS 250.035(2)(a), which, quite plainly, is the
disclosure of information related to taxes paid by corporations
and other entities doing business in Oregon.  The adjective
"confidential," used in conjunction with the broad noun
"information," encompasses information that the proposed measure
does not, in fact, seek to make public -– including information
that is primarily characterized by its confidential status, such
as trade secrets -- and fails accurately to describe other
information that the proposed measure would make public, such as
the nonconfidential assessed value of Oregon real property. 
Moreover, the phrase "confidential business information" focuses
the reader's attention on an ill-defined category of data, rather
than on the specific tax and related financial information that,
as noted, is the subject of the proposed measure.  Thus, we
conclude that the word "confidential" is likely to confuse or
mislead potential petition signers and voters as to the content
of the proposed measure. 
Petitioners also argue that the proposed measure is
inaccurate because the word "business" includes in its scope some
entities that are not required to pay corporate income or excise
taxes and that, therefore, Initiative Petition 67 does not
address.  We reject that argument because the adjective
"specified" indicates that the measure does not target all
businesses. (1)
Petitioners also argue that the caption's reference to
"internet disclosure" is an "implementing detail" that should not
appear in the caption.  Petitioners do not contend that that
reference is inaccurate or misleading, although they assert that
it is not the "subject" of the measure.  They argue that the
words "internet disclosure" consume space that is scarce in a
caption that is limited to 15 words.  We agree that the reference
to Internet disclosure is less important than other aspects of
the measure, but we cannot say that the Attorney General must
exclude it from the caption.  The Attorney General will have the
opportunity to modify the caption, as described above.  If the
modified caption otherwise accurately describes the subject of
the measure, the Attorney General may include the words "internet
disclosure" in the caption if that addition would not exceed the
word limit.
ORS 250.035(2)(b) and (c) states that the "yes" and
"no" vote result statements must describe, in "simple and
understandable" terms, the "result" if the measure is accepted or
rejected.  The Attorney General's "yes" and "no" vote result
statements, like the Attorney General's caption, contain the
phrase "confidential business information" and suffer from the
same defects that we identified in the caption.  We therefore
agree with petitioners that the "yes" and "no" vote result
statements do not substantially comply with ORS 250.035(2)(b) and
(c).
Finally, petitioners challenge the Attorney General's
summary in several particulars and more generally on the ground
that the measure "fails to clearly describe how the proposal
works or the breadth of its impact."  ORS 250.035(d) requires
that the summary be a "concise and impartial statement of not
more than 125 words summarizing the state measure and its major
effect."  This court has explained that the purpose of the
summary is to "help voters understand what will happen if the
measure is approved."  Fred Meyer, Inc. v. Roberts, 308 Or 169,
175, 777 P2d 406 (1989).  We have considered petitioners'
arguments in light of that purpose and conclude that they are not
well taken.  Nonetheless, for the reasons that we have described
above, the Attorney General must make changes to the caption and
to the "yes" and "no" vote result statements.  Those changes may
alter the calculus of what constitutes an appropriate summary,
and the Attorney General has the authority to modify the summary,
should he find it appropriate to do so.  See Mabon, 332 Or at 640
(recognizing that authority).
In summary, we hold that the caption and the "yes" and
"no" vote result statements of the Attorney General's certified
ballot title do not substantially comply with the requirements
set out in ORS 250.035(2)(a), (b), and (c).  The ballot title
must be referred to the Attorney General for modification.  See
ORS 250.085(8) (authorizing that disposition).
Ballot title referred to Attorney General for
modification.
APPENDIX
PROPOSED MEASURE
BE IT ENACTED BY THE PEOPLE OF OREGON
Section 1. STATEMENT OF NEED.  The People of Oregon find:
(1) Corporations doing business in Oregon pay a lower tax rate
on their profits than individuals and small businesses pay
on their wages, earnings and other income.
(2) Oregon lawmakers have given corporations doing business in
Oregon a number of tax credits, deductions and other tax
breaks that result in those corporations paying as little as
$10 per year in Oregon income taxes and low property taxes.
(3) Since 1990, corporations have been paying a decreasing share
of taxes used to fund essential government services,
including education (k-12 through higher education), public
safety, senior services and health care.
(4) Corporations doing business in Oregon do not have to
publicly disclose information relating to their total
taxable income in Oregon or the amount of taxes they have
paid in Oregon.
(5) Public disclosure of corporations' total taxable income in
Oregon and the amount of taxes they have paid in Oregon will
improve the ability of Oregon citizens to evaluate the
fairness of state income tax policies and to hold lawmakers
accountable for laws that reduce corporate taxes and thereby
reduce revenue available to fund essential government
services.
(6) Based upon experience at the federal level, where publicly
traded corporations must report their total taxable income
and actual tax liability, there is no evidence of harm to
the corporations of such disclosure.
Section 2. DISCLOSURE OF CORPORATE TAX PAYMENTS
(1) The following corporations that are engaged in business in
this state and that are required to file an excise or income
tax return for purposes of ORS chapter 317 or 318, shall
file with the Secretary of State the statement described in
subsection (2) of this section:
(a) All publicly traded corporations.
(b) All financial corporations and insurers, both as
defined in ORS 317.010.
(c) All corporations not described in paragraph (a) or (b)
of this subsection having on the January 1 preceding a
number of full-time employees in excess of 50, or for
the period referred to in subsection(2)(b) of this
section, sales in excess of $10,000,000.
(d) Personal service corporations shall be exempt from this
disclosure requirement.
(2) The statement shall be on a form prescribed by the Secretary
of State and shall contain the following information:
(a) The name of the corporation, business activity code,
type of corporation and the name of the registered
agent to accept service.
(b) The state excise tax or income tax liability under ORS
chapter 317 or 318 of the corporation for the tax year
ending in the fiscal period beginning July 1 and ending
June 30 immediately before the date the statement is
required to be filed.
(c) The most recent assessed value of real and personal
property located in Oregon and the gross assessed tax
on that property[.]
(d) The corporation's business presence in Oregon, as
reflected in the following apportionment factors:
(A) The amount and percentage of sales within and
without Oregon that are allocated or apportioned
to Oregon;
(B) The amount and percentage of payroll expenses
within and without Oregon that are allocated or
apportioned to Oregon;
(C) The amount and percentage of real and personal
property within and without Oregon that is
allocated or apportioned to Oregon[.]
(e) The apportionment factor used to calculate the
corporation's taxable income in Oregon.
(f) Total taxable income allocated or apportioned to Oregon
for the tax year described in paragraph (b) of this
subsection.
(g) Total United States taxable income, as reported to the
IRS for the tax period described in paragraph (b) of
this section.
(3) For the fiscal year ending June 30, 2006, statements must be
filed with the Secretary of State on or before March 15,
2007.  Thereafter, the statement shall be filed at the same
time as the corporations' state tax returns are filed, but
no later than March 15 of the following year.  If a
corporation files an amended return, either on its own
initiative or after an audit, the corporation shall file a
revised statement under this section not later than 60
calendar days after the amended return is filed.
(4) The statements required by this section shall be maintained
as public records in the office of the Secretary of State
and shall be made available on the internet.
(5) The Secretary of State shall develop and implement an
oversight and penalty system to ensure that corporations
doing business in Oregon provide the required information in
a timely and accurate manner.
(6) Nothing in this section permits disclosure to the Secretary
of State, or any employee or agent of the Secretary of
State, by the Department of Revenue or its employees of any
information under ORS 314.835 that the department may not
disclose.
Section 3. Section captions.  The section captions used in
this Act do not become part of the statutory law of this state.
Section 4. Severability.  If any section of this Act is for
any reason held to be invalid or unconstitutional by a court of
competent jurisdiction, the remaining sections shall remain in
full force and effect.

1. Petitioners further contend that the word "specified" "makes it sound like the measure
targets specific businesses, rather than regulating a category of corporations that meet certain
characteristics."  Petitioner proposes the term "certain" as a substitute.  We see little difference
between those terms in this context, and so we decline to instruct the Attorney General not to use
the term "specified."
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