Dale v. Keisling

• Citation: 999 P.2d 1229,167 Or. App. 394
• Parties: Alice DALE, Appellant, v. Phil KEISLING, Bruce Holliday, Colin Sorhus and Dale T. Crabtree, Respondents.
• Decision Date: 24 May 2000
• Court: Court of Appeals of Oregon

999 P.2d 1229

167 Or. App. 394

Alice DALE, Appellant, v. Phil KEISLING, Bruce Holliday, Colin Sorhus and Dale T. Crabtree, Respondents.

(98C-18552; CA A105873)

Court of Appeals of Oregon.

Argued and Submitted November 1, 1999.

Decided May 24, 2000.

B. Carlton Grew, Portland, argued the cause and filed the brief for appellant.

David Schuman, Deputy Attorney General, argued the cause for respondent Phil Keisling. With him on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

No appearance for respondents Bruce Holliday, Colin Sorhus and Dale T. Crabtree.

Before LANDAU, Presiding Judge, and EDMONDS and BREWER, Judges.

LANDAU, P.J.

At issue in this case is whether proposed initiative Measure 2000-15 contains two or more constitutional amendments that must be voted on separately under Article XVII, section 1, of the Oregon Constitution. Secretary of State Phil Keisling (Secretary) and the trial court concluded that it does not. We conclude that it does and reverse and remand for entry of judgment reversing the Secretary's decision and declaring that Measure 2000-15 does not conform to Article XVII, section 1.

Measure 2000-15, if enacted, would amend the constitution by creating a new article, to be known as Article IX-A. In general, the measure would abolish most existing forms of taxation and replace them with a single "gross receipts" tax. It consists of 18 sections. Section (1) provides:

"Gross receipts tax to be primary means of generating revenue. The gross receipts tax shall be the primary means of generating state and local government revenue. No tax, fee, assessment or other revenue-generating mechanism shall exist in this state, except as expressly provided by this Article."

(Boldface and underscoring in original.) Section (2) sets the rate of the gross receipts tax at 2.2 percent of "gross consideration." It further provides that the rate may be increased only by a "double-majority" requirement, that is, by a majority of the voters who cast ballots on the issue in a majority of the counties in the state. Section (3) provides that, in addition to the state gross receipts tax, there may be a local gross receipts tax adopted by a vote of the people in one of four prescribed local tax districts, subject to a similar double-majority requirement, namely, a majority of the votes cast from a majority of the participating precincts. Section (4) provides that the gross receipts tax must be paid by the person receiving the gross consideration, but permits employers to withhold the tax from compensation for employment and remit it directly to the state. Section (5) sets forth various exemptions from the gross consideration that is subject to the tax. Section (6) defines "gross consideration" to mean, among other things, wages, salary, tips, other compensation for employment, rent, lease payments and other forms of income. Section (7) imposes a penalty for failure to pay the gross receipts tax. Section (8) describes a formula for the distribution of gross receipts tax revenues to state and local governments and school districts. Section (9) prohibits the state from incurring any bonded indebtedness, subject to enumerated exceptions. Section (10) specifies certain sources of revenue that are permitted in addition to the gross receipts tax, including user charges, tuition, rent, unemployment insurance taxation, fines, penalties, and the common school fund. Section (11) provides that, if federal law makes receipt of federal benefits conditional on the imposition of a state tax, the legislature must refer to the people the decision to approve the acceptance of the federal benefit and impose the required state tax. It further requires the legislature, upon voter approval of the acceptance of the federal benefits and the imposition of the required tax, to request the federal government to waive the imposition of the state tax as a condition of receipt of the federal benefits. Sections (12) through (17) include various administrative and implementing provisions.

The chief petitioners filed Measure 2000-15 with the Secretary of State. Upon receipt of the proposed measure, the Secretary issued a notice seeking public input to assist in the review of the measure for compliance with constitutional requirements. Plaintiff submitted comments in which she suggested that the measure contained more than one amendment to the constitution and could not be submitted as a single amendment under Article XVII, section 1. The Secretary disagreed and approved the form of the measure.

Plaintiff then initiated this action for judicial review of the Secretary's decision and for declaratory judgment, naming as defendants both the Secretary and the chief petitioners. Plaintiff moved for summary judgment. So did the Secretary. The trial court denied plaintiff's motion, allowed the Secretary's motion, and entered judgment dismissing plaintiff's complaint. Plaintiff appeals, challenging the trial court's denial of her motion for summary judgment and the allowance of the Secretary's motion.

On appeal, plaintiff argues that Measure 2000-15 contains more than one amendment. According to plaintiff, under Article XVII, section 1, as construed by the Oregon Supreme Court in Armatta v. Kitzhaber, 327 Or. 250, 959 P.2d 49 (1998), a measure contains more than one amendment if it would make two or more substantive changes to the constitution that are not "closely related." In this case, plaintiff argues, Measure 2000-15 clearly makes more than two substantive changes to the constitution; the only question is whether those changes are "closely related." Plaintiff argues that the multiple changes to the constitution that would be effected by enactment of Measure 2000-15 are not closely related, because they affect so many different rights and powers of so many different persons and government entities.

The Secretary agrees that the enactment of Measure 2000-15 would make more than two substantive changes to the constitution, but he asserts that those changes are, at least "arguably," closely related. According to the Secretary, all of the changes that would result from enactment of Measure 2000-15 concern changes in methods of raising revenue and how those changes in the methods of raising revenue affect spending.

Article XVII, section 1, provides, in part:

"When two or more amendments shall be submitted * * * to the voters of this state at the same election, they shall be so submitted that each amendment shall be voted on separately."

In Armatta, the Supreme Court examined in detail the language and history leading to the enactment of Article XVII, section 1, and, on the basis of that examination, established a test for determining whether a given measure contains more than one amendment.

"We conclude that the proper inquiry is to determine whether, if adopted, the proposal would make two or more changes to the constitution that are substantive and that are not closely related. If the proposal would effect two or more changes that are substantive and not closely related, the proposal violates the separate-vote requirement * * *."

327 Or. at 277, 959 P.2d 49. Thus, under Armatta, the test consists of three component questions: (1) Would the measure effect two or more "changes" to the constitution? (2) Are those changes "substantive" in nature? And, (3) are those changes "closely related"?

The Armatta opinion did not explicitly provide any guidance as to the meaning of the quoted terms in each of the three questions. Nevertheless, from the court's extended discussion of the language and history of Article XVII, section 1, as well as from its actual application of the three-fold inquiry in that case, we may derive several corollary principles that inform our application of the test in this case.

First, as to the focus of the first question, concerning "changes" to the constitution, we note that the court's focus is not on the form of the amendment itself, but rather on the effect its enactment would have on the Oregon Constitution. The court made that much clear in Armatta in its careful examination of the text:

"Although Article XVII, section 1, does not define what is meant by `two or more amendments,' it is important to note that the text focuses upon the potential change to the existing constitution, by requiring that two or more constitutional amendments be voted upon separately."

Id. at 263, 959 P.2d 49 (emphasis in original). The court further emphasized the point in drawing a distinction between what it termed the "separate-vote" requirement of Article XVII, section 1, and the "single-subject" requirement of Article IV, section 1(2)(d). The court held that, while the focus of single-subject analysis is exclusively the form of the proposed amendment itself, the focus of separate-vote analysis includes the nature of the proposed change to the existing constitution. Id. at 274, 959 P.2d 49. Finally, the point is perhaps most clearly established by the manner in which the court applied its analysis to the enactment at issue in that case. In Armatta, the court addressed whether Ballot Measure 40 (1996), a "crime victims' rights" initiative that was approved by the voters in the 1996 general election, violated Article XVII, section 1. In concluding that Measure 40 did, in fact, contain more than one amendment, the court focused exclusively on the effect that the enactment of the measure had on the existing constitution. Id. at 283-84, 959 P.2d 49.

Second, concerning the "substantive" nature of the proposed changes, we assume that the court intended to exclude merely formal changes involving, for example, changes to numbering, modernization of spelling, and the like. We also infer from the Armatta decision that the proposed changes must be real, rather than merely possible or speculative in nature. We note that, in its analysis of Measure 40, the Supreme Court limited its focus to those changes...