SENATE COMMITTEE ON JUDICIARY

June 11, 2003 Hearing Room 343

8:00 a.m. Tapes 160 - 161

MEMBERS PRESENT: Sen. John Minnis, Chair

Sen. Ginny Burdick, Vice-Chair

Sen. Ted Ferrioli

Sen. Charlie Ringo

Sen. Charles Starr

MEMBER EXCUSED: Sen. Vicki Walker

STAFF PRESENT: Craig Prins, Counsel

Bill Taylor, Counsel

Ann Martin, Committee Assistant

MEASURE/ISSUES HEARD: HB 2409A Public Hearing and Work Session

HB 2865A Work Session

HB 2094A Public Hearing

HB 2368B Public Hearing

These minutes are in compliance with Senate and House Rules. Only text enclosed in quotation marks reports a speaker’s exact words. For complete contents, please refer to the tapes.

TAPE/#	Speaker	Comments
TAPE 160, A
003	Chair Minnis	Calls the meeting to order at 8:24 a.m. Opens a public hearing on HB 2409A.
HB 2409A PUBLIC HEARING
009	Craig Prins	Committee Counsel. Introduces HB 2409A which provides that Supreme Court has exclusive jurisdiction to decide appeal of certain actions filed before January 1, 2003, in which one or more cities or counties are plaintiffs, State of Oregon is defendant and appeal relates to decision of trial court on one or more claims challenging manner in which Public Employees Retirement System is administered.
0024	Chair Minnis	Closes the public hearing on HB 2409A and opens a work session.
HB 2409A WORK SESSION
026	Vice Chair Burdick	MOTION: Moves HB 2409A to the floor with a DO PASS AS AMENDED recommendation.
		VOTE: 4-0-2 EXCUSED: 2 - Ringo, Walker
030	Chair Minnis	Hearing no objection, declares the motion CARRIED. SEN. MINNIS will lead discussion on the floor.
031	Chair Minnis	Closes the work session on HB 2409A and opens a work session on HB 2865A.
HB 2865A WORK SESSION
032	Craig Prins	Committee Counsel. Introduces HB 2865A which allows district attorney to treat certain nonperson felonies as Class A misdemeanors. Discusses the –A7 amendments (EXHIBIT A).
040	Chuck French	District Attorney, Multnomah County District Attorneys Office. Testifies in support of HB 2865A.
069	Kelly Skye	Oregon Criminal Defense Lawyers Association. Says she is satisfied with the –A7 amendments.
080	Vice Chair Burdick	MOTION: Moves to ADOPT HB 2865A-7 amendments dated 06/06/03.
		VOTE: 5-0-1 EXCUSED: 1 - Walker
081	Chair Minnis	Hearing no objection, declares the motion CARRIED.
083	Vice Chair Burdick	MOTION: Moves HB 2865A to the floor with a DO PASS AS AMENDED recommendation.
		VOTE: 5-0-1 EXCUSED: 1 - Walker
085	Chair Minnis	Hearing no objection, declares the motion CARRIED. SEN. RINGO will lead discussion on the floor.
094	Chair Minnis	Closes the work session on HB 2865A and opens a public hearing on HB 2368B and HB 2094A.
HB 2094A and HB 2368B PUBLIC HEARING
101	Rep. Phil Barnhart	Representative, House District 11. Testifies in support of HB 2368B which makes technical and administrative changes to cigarette and tobacco products taxes to facilitate administration and enforcement.
158	Pete Shepherd	Deputy Attorney General, Department of Justice. Submits testimony and testifies on HB 2368B. Discusses the –B15, -B16, -B17, -B18, -B19, and –B20 amendments to HB 2368B (EXHIBITS B-G). Submits testimony and testifies on HB 2094A which requires tobacco product manufacturers to report certain information to Attorney General. Discusses the -A5, -A6, -A7 amendments and says the -A8 amendments have been superceded by the -A9 amendments (EXHIBITS H-K). Explains charts for both bills (EXHIBITS L & M).
300	Matt Macauley	Assistant Attorney General, Department of Justice, Organized Crime Section. Submits testimony and testifies on HB 2368B and talks about the Oregon Tobacco Compliance Task Force (EXHIBIT N).
339	Sen. Ferrioli	Discusses bill. Asks about loss of revenue from tobacco products.
384	Macauley	Says that he would like to discuss that later. Continues his testimony.
390	Sen. Ferrioli	Comments that someday that discussion needs to happen.
393	Macauley	Says that the task force has confirmed that we are losing between 30 and 40 percent in revenue in contraband products. Discusses loss of revenue from intrastate smuggling, Internet and transnational organized crime elements.
TAPE 161, A
003	Macauley	Continues his testimony on HB 2368B.
015	Sen. Ferrioli	Says that the contraband products must not have been in mainstream distribution channels.
019	Macauley	Answers that the problem with other tobacco products is that they are not stamped.
042	Shepherd	Addresses the other issues of the bill. Talks about funding for the task force.
179	Shepherd	Testifies on HB 2094A. Discusses Non-Participating Manufacturer Law (NPM). Says they strongly support the –A9 amendments (Exhibit K).
276	Chair Minnis	Asks if they are talking about retailers.
282	Shepherd	Answers that this marketplace includes fairly distinct levels of distributors.
288	Chair Minnis	Asks if these penalties are applicable to a store that sells contraband products.
293	Macauley	Answers, yes.
302	Sen. Ferrioli	Asks if this case was approached from a RICO (Racketeer Influenced and Corrupt Organization) standpoint or as an isolated incident.
312	Macauley	Answers that this was an isolated incident.
339	Chair Minnis	Asks about the laws created in 2001 and sentencing of these crimes.
347	Macauley	Explains that there were felonies created last session, but this bill enhances the penalties.
389	Vice Chair Burdick	Asks about the –A5 amendments regarding an allocable share cap (Exhibit H).
399	Shepherd	Talks about the –A5 amendments.
432	Vice Chair Burdick	Says she appreciates Shepherd’s clear presentation. Asks about the private cause of action.
TAPE 160, B
010	Vice Chair Burdick	Asks about large companies driving small companies out of business.
014	Shepherd	Answers that if the companies are driven out of the marketplace because they are not complying then that would produces the positive public benefit of helping to enforce those statutes.
044	Vice Chair Burdick	Says that if they are just going out after the noncompliant companies and don’t want to harm the compliant companies, then why shouldn’t the responsibility be to file these suits with the Attorney General.
048	Shepherd	Explains that the original conception of HB 2368 did not include a private cause of action.
061	Vice Chair Burdick	Asks where the recoveries would go if an action is taken by the attorney general.
063	Shepherd	Responds that the recoveries would go into the general fund.
083	Sen. Ringo	Asks if Mr. Shepherd can quantify how important it is to enforce the laws with a private cause of action.
089	Shepherd	Explains that there are 3 ways in which a private cause of action would add some value to our enforcement effort.
120	Sen. Ringo	Asks for other examples of private rights of action.
122	Shepherd	Answers that another example would be the state’s unlawful trade practices act and the racketeering statute.
157	Chair Minnis	Recesses the public hearing on HB 2094A and HB 2368B and opens a work session on HB 2865A.
HB 2865A WORK SESSION
159	Craig Prins	Committee Counsel. Says that they need to adopt the –A5 amendments (EXHIBIT O).
168	Vice Chair Burdick	MOTION: Moves to SUSPEND the rules for the purpose of RECONSIDERING the vote on HB 2865A.
		VOTE: 5-0-1 EXCUSED: 1 - Walker
170	Chair Minnis	Hearing no objection, declares the motion CARRIED.
175	Vice Chair Burdick	MOTION: Moves to RECONSIDER the vote by which HB 2865A was sent to the floor with a DO PASS AS AMENDED recommendation.
177		VOTE: 5-0-1 EXCUSED: 1 - Walker
179	Chair Minnis	Hearing no objection, declares the motion CARRIED.
179	Vice Chair Burdick	MOTION: Moves to ADOPT HB 2865A-5 amendments dated 05/28/03.
182	Bill Taylor	Committee Counsel. Discusses –A5 amendments.
190		VOTE: 4-0-2 EXCUSED: 2 - Ferrioli, Walker
191	Chair Minnis	Hearing no objection, declares the motion CARRIED.
193	Vice Chair Burdick	MOTION: Moves HB 2365A to the floor with a DO PASS AS AMENDED recommendation.
		VOTE: 5-0-1 EXCUSED: 1 - Walker
195	Chair Minnis	Hearing no objection, declares the motion CARRIED. SEN. RINGO will lead discussion on the floor.
197	Chair Minnis	Closes the work session on HB 2865A and re-opens the public hearing on HB 2094A and HB 2368B.
HB 2094A and HB 2368B PUBLIC HEARING RE-OPENED
210	Marshall Coba	Council of Independent Tobacco Manufacturers of America (CITMA). Submits testimony and testifies on HB 2094A and HB 2368B (EXHIBITS P & Q).
224	Mr. Jim Deer	Legal Counsel, Singlestick Tobacco Company and USA Tobacco Distributing. Submits testimony and testifies on HB 2094A and HB 2368B (EXHIBIT R).
348	Deer	Continues his testimony on HB 2094A and HB 2368B.
TAPE 161, B
010	Deer	Continues his testimony on bill. Reads from Exhibit R.
133	Chair Minnis	Asks if the provision in Section 82, page 33, line 21 of HB 2368B would apply to his company. Asks why he would not want that power.
140	Deer	Addresses that question. Says that they are a small tobacco company and his litigation budget is small.
180	Chair Minnis	Closes the public hearing on HB 2094A and HB 2368B. Adjourns the meeting at 10:00 a.m.

EXHIBIT SUMMARY

A – HB 2865A, -A7 amendments, submitted by staff, dated 6/6/03, 2 pgs.

B – HB 2368B, -B15 amendments, submitted by staff, dated 5/27/03, 1 pg.

C – HB 2368B, -B16 amendments, submitted by staff, dated 5/27/03, 1 pg.

D – HB 2368B, -B17 amendments, submitted by staff, dated 5/28/03, 1 pg.

E – HB 2368B, -B18 amendments, submitted by staff, dated 5/28/03, 3 pgs.

F – HB 2368B, -B19 amendments, submitted by staff, dated 6/3/03, 2 pgs.

G – HB 2368B, -B20 amendments, submitted by staff, dated 6/6/03, 1 pg.

H – HB 2094A, -A5 amendments, submitted by staff, dated 5/12/03, 6 pgs.

I – HB 2094A, -A6 amendments, submitted by staff, dated 5/20/03, 1 pg.

J – HB 2094A, -A7 amendments, submitted by staff, dated 5/27/03, 1 pg.

K – HB 2094A, -A9 amendments, submitted by staff, dated 6/11/03, 2 pgs.

L – HB 2368A, chart, submitted by Pete Shepherd, 2 pgs.

M – HB 2094A, chart, submitted by Pete Shepherd, 1 pg.

N – HB 2368B, press release, submitted by Matt Macauley, dated 6/10/03, 2 pgs.

O – HB 2865A, -A5 amendments, submitted by staff, dated 5/28/03, 1 pg.

P – HB 2094A, written testimony, submitted by Marshall Coba, 2 pgs.

Q – HB 2368B, written testimony, submitted by Marshall Coba, 2 pgs.

R – HB 2094A, application for enforcement order, submitted by Jim Deer, 2 pgs.