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WORK
SESSION HB 2368-A, BILL
INTRODUCTION LC 3606 |
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TAPE 153 AB,
154, A |
MAY 2,
2003 8:30 AM STATE CAPITOL BUILDING
Members Present: Representative Lane Shetterly, Chair
Representative
Wayne Scott, Vice Chair
Representative
Joanne Verger, Vice Chair
Representative
Phil Barnhart
Representative
Vicki Berger
Representative
Pat Farr
Representative
Mark Hass
Representative
Elaine Hopson
Representative
Max Williams
Witness Present: Pete Shepherd, Oregon Attorney
General’s Office
Marshall
Coba, The Council of Independent Tobacco
Manufacturers of America
Jim
Gardner, Phillip Morris
Mark
Nelson, R.J. Reynolds Tobacco
Staff Present: Paul
Warner, Legislative Revenue Officer
Richard
Yates, Legislative Revenue Office
Kathy
Tooley, Committee Assistant
TAPE 153, SIDE A
|
006 |
Chair Shetterly |
Calls meeting to order at 8:40 a.m. |
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010 |
Chair Shetterly |
MOVES INTRODUCTION OF LC
3606, (Exhibit 1), AS A COMMITTEE BILL. |
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013 |
Chair Shetterly |
Clarifies the bill is entered as a Revenue Committee Bill, but does
not indicate support or opposition by the members of the Committee. |
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015 |
Chair Shetterly |
ORDER THERE BEING NO
OBJECTION, THE CHAIR SO ORDERS:
Members Present: Shetterly, Barnhart, Berger, Farr, Hass, Hopson, Scott,
Verger. Excused Williams. |
OPENED WORK SESSION ON HB 2368
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026 |
Richard Yates |
Discussed amendments to -8 amendments replaced by -11 (Exhibit 2); -9
amendments replaced by -12 amendments (Exhibit 3). |
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036 |
Yates |
The -11 has the broader requirements. |
|
038 |
Chair Shetterly |
The -11 has full, private, and Attorney General enforcement power. |
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041 |
Yates |
-A12 replaces the -A9, and is limited to Attorney General only
enforcement power over provisions of the act. |
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044 |
Yates |
Described -A13 amendment (Exhibit 4). Discussed the qualifying statute under the Master Settlement
Agreement (MSA) and its requirements. Discussed requirements for escrow
monies for non-participating manufacturers (NPM). |
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065 |
Yates |
Discussed new wording in Section 82 and -11 vs. -12 amendments. |
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088 |
Chair Shetterly |
Authored the -13 amendment, the intent for those in compliance is to
limit enforcement to Department of Justice (DOJ) action; those out of
compliance are open to private and public enforcement. |
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120 |
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Questions and discussion regarding similarities and differences to
drug houses. |
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143 |
Pete Shepherd |
As to -13 amendments has same position as with -8 amendment. Do not object to them as -9 (-12) is
adequate. Do not object to –A13s. |
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170 |
Rep. Verger |
How is there a difference between illegal traffic in drugs vs. cigarettes
as far as enforcement of the public is concerned. |
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172 |
Shepherd |
No difference. Discussed
private action, in anti-trust area, competitors can sue other competitors; in
the drug house area there is not a competitor vs. competitor situation. |
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187 |
Rep. Barnhart |
In drug house case, a neighbor could have common law cause of action
under a nuisance theory, what’s different, why wouldn’t anybody have a common
law cause of action. |
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195 |
Shepherd |
Amendments being discussed will create a new statutory scheme to
regulate delivery sales. Current
prohibitions are to delivery of tobacco to minors. There is no statutory framework that provides this kind of
marketing tool for a specific regulatory scheme. |
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203 |
Rep. Verger |
Would like to draw similarities, to discourage minors from buying
cigarettes. Public interest for this to be turned into revenue for the State
of Oregon. |
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211 |
Shepherd |
Would agree, have collaborated with DOR, Oregon State Police and the
Tobacco Compliance Task Force. |
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232 |
Chair Shetterly |
If a private right of action is not authorized, could somebody file a
complaint and allege a common law basis?
This clarifies there is a claim if Committee approve a private right
of action. |
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235 |
Shepherd |
If a statute is written, there would not be a question. If you don’t put in the statute don’t
think anyone could infer a claim if not provided for explicitly in the
amendments. |
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243 |
Marshall Coba |
Spoke In support of -12 amendments, reiterated comments from previous
day’s hearing. 2368-A12 and HB 2490
provide for adequate enforcement in the tobacco world. |
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Coba |
Case has not been made that the private side, in addition to Oregon’s
Attorney General, is going to collect additional revenue. |
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284 |
Chair Shetterly |
In looking at -13s, only subject to private right of action if
non-participating, but you are also noncompliant. If you are non-participating, but in compliance, the -13 would
give safe harbor. |
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299 |
Coba |
We’re not sure if the line is very bright, the compliance issue is
the key. Question is what is
compliance and what is non-compliance? |
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308 |
Chair Shetterly |
What are 293.535? |
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310 |
Yates |
That is the definition of a non-participating manufacturer. |
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311 |
Chair Shetterly |
Asked Shepherd, is this a bright line or not a bright line? |
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310 |
Shepherd |
Question of bright line vs. non-bright line, discussed escrow statute
and lack of ambiguity. These are not all slam dunk cases, but the statutory
scheme is a clear roadmap for a NPM that wants to comply. Are there differences in Oregon Department
of Justice and NPMs? Sure. |
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352 |
Rep. Barnhart |
At issue is: are the resources available to AG’s office. Do you have the wherewithal to do the
level of enforcement needed for a significant problem? |
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367 |
Shepherd |
Two kinds of enforcement responsibilities: First to MSA to diligently enforce the NPM area. That area
needs legislative help to be fully funded; believe AG’s office has complied
but at costs to other programs. |
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391 |
Shepherd |
Regarding resources to enforce compliance with tobacco tax laws. This
is funded thru Tobacco Task Force through the next biennium. |
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419 |
Rep. Verger |
If you bring in 3 times the amount of money, it seems to me that you
have paid for that enforcement. Does
it not work that way? Does above the
line go to the state? |
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400 |
Shepherd |
I think, that is the way the tobacco task force is operating. Discussed how funds are controlled and
expended. For NPM, under current law AG’s
office not allowed to cover cost from the wrong doer and is addressed in HB
2094. |
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460 |
Yates |
One comment with the issue coming up, the revenue impact provided for
the -A10s fits the later amendment as regards where the money comes from for
the health plan. |
TAPE 153, SIDE A
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014 |
Jim Gardner |
Discussed distinctions between -11 but the -13s are better than 12s
from perspective of law enforcement. Explained the -11s allow private
enforcement of the internet sales provisions aimed at strengthening
safeguards against internet sales to minors. |
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031 |
Gardner |
With -13s, if manufacturer compliant with escrow provision, there
would be no private sector enforcement of the internet sales protection aimed
at prohibiting sales to minors. |
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038 |
Gardner |
With -11s the benefit of private sector enforcement of internet sales
provisions for protecting minors, whether or not the manufacturer was
compliant. |
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042 |
Mark Nelson |
Discussed loss of revenues to Oregon: Prior to MSA, NPMs were under
2%; after MSA it is up to 13% in 5 years.
At 13% because many NPMs are not abiding by state laws relating to
escrow accounts. They have grown because
they can offer cigarettes at cheaper prices. If sales go down, funds to
states go down under MSA. This is an
attempt to curb that. |
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072 |
Rep. Barnhart |
MOTION: MOVED ADOPTION OF THE
–A11 AMENDMENT INTO HB 2368. |
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076 |
Rep. Barnhart |
The State of Oregon has a strong interest in
supporting the MSA and the revenues derived under that agreement including
the highest level of enforcement to ensure compliance with the rules. There
is an additional interest for compliance with the statute, because that is
where Oregon derives revenue. Revenue
is not derived from funds deposited in an escrow account. Discussed
additional interest in protecting the health of minors, private action will
increase the likelihood that sale of inexpensive tobacco products to minors
will not be encouraged. |
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112 |
Rep. Verger |
Cited elimination of people from the Oregon Health
Plan. Would support an increase in
tax on cigarette taxes. Knowing people are not complying, would support
strongest enforcement possible. |
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128 |
Rep. Farr |
Agonized over decision, support the -11s for its
potential revenue impact, and it is a strong statement that would help cut
down on youth smoking. |
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139 |
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ROLL CALL: MOTION PASSED 6-2-1 REPRESENTATIVES VOTING AYE:
Barnhart, Farr, Hass, Scott, Verger, Chair Shetterly. REPRESENTATIVES VOTING NO: Berger, Williams. EXCUSED: Hopson. |
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106 |
Rep. Barnhart |
MOTION: MOVED HB 2368 AS
AMENDED TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION AND A SUBSEQUENT
REFERRAL TO WAYS AND MEANS. ROLL CALL: MOTION PASSED 8-0-1 REPRESENTATIVES VOTING AYE:
Barnhart, Berger, Farr, Hass, Scott, Verger, Williams, Chair
Shetterly. |
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167 |
Chair Shetterly |
Meeting adjourned at 9:35 a.m. |
Tape Log Submitted by,
Kathy Tooley, Committee
Assistant
Exhibit Summary:
1.
Chair
Shetterly, “LC 3606”, 5 pages
2.
Yates,
“HB 2368-A11 Amendment”, 9 pages
3.
Yates,
“HB 2368-A12 Amendment”, 8 pages
4.
Yates,
“HB 2368-A13 Amendment”, 9 pages