74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2997
A-Engrossed
House Bill 2967
Ordered by the House June 6
Including House Amendments dated June 6
Sponsored by COMMITTEE ON REVENUE
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Eliminates cap on maximum amount of tobacco products tax
imposed on cigars. - }
{ - Applies to tobacco products tax reporting periods
beginning on or after effective date of Act. - }
{ - Takes effect on 91st day following adjournment sine
die. - }
{ + Creates Oregon Healthy Kids Program to provide health
insurance to uninsured children under 19 years of age.
Establishes provisions relating to implementation, funding and
administration of program.
Increases taxes on tobacco products and revises distribution
formula of tobacco tax revenues.
Refers Act to people for their approval or rejection at special
election to be held on date specified in chapter ___, Oregon Laws
2007 (Enrolled ___ Bill ___) (LC ___). + }
A BILL FOR AN ACT
Relating to tobacco products taxation; creating new provisions;
amending ORS 323.457 and 323.505; appropriating money;
providing for revenue raising that requires approval by a
three-fifths majority; and providing that this Act shall be
referred to the people for their approval or rejection.
Whereas more than 117,000 Oregon children do not have health
insurance; and
Whereas health care costs continue to rise, putting affordable
health care further out of reach for thousands of Oregonians and
their children; and
Whereas health insurance coverage is key to ensuring children's
access to appropriate and necessary health care, including
preventive services; and
Whereas children without health insurance are much less likely
to have access to basic preventive health care and to receive
early treatment for injuries and disease, greatly endangering
their health and their future; and
Whereas to protect the health of Oregon's children, the state
should ensure access to health care through insurance coverage,
support of safety net clinics and greater provision of health
care in rural Oregon; and
Whereas to protect the health of Oregon's children, the state
needs a robust tobacco use prevention and education program; and
Whereas it is in the best interest of the state to provide for
the health and welfare of Oregon's children; now, therefore,
Be It Enacted by the People of the State of Oregon:
{ +
OREGON HEALTHY KIDS PROGRAM + }
SECTION 1. { + The Oregon Healthy Kids Program is created to
provide affordable, accessible health care for Oregon's children.
The program is composed of:
(1) A statewide Healthy Kids Nurse Advice Line;
(2) A statewide Healthy Kids Health Care Access Line used in
conjunction with statewide enrollment and retention efforts;
(3) Medical assistance provided to children under the Oregon
Health Plan and other state programs funded by the Legislative
Assembly;
(4) A private health option administered by the Office of
Private Health Partnerships under sections 4, 5 and 6 of this
2007 Act;
(5) Dedicated funds to support safety net clinics and provision
of health care in rural Oregon; and
(6) Expanded access to comprehensive health care services for
pregnant women. + }
SECTION 2. { + (1) The Oregon Healthy Kids Fund is established
in the State Treasury, separate and distinct from the General
Fund. Interest earned by the Oregon Healthy Kids Fund shall be
credited to the Oregon Healthy Kids Fund.
(2)(a) Except as provided in paragraphs (b) and (c) of this
subsection, moneys in the Oregon Healthy Kids Fund are
continuously appropriated to the Department of Human Services and
the Office of Private Health Partnerships to provide health care
to:
(A) Uninsured children under 19 years of age through the Oregon
Health Plan, the Family Health Insurance Assistance Program and
the private health option described in sections 4, 5 and 6 of
this 2007 Act.
(B) Pregnant women eligible for the Oregon Health Plan under
section 3 (4) of this 2007 Act.
(b) 3.97 percent of the moneys in the Oregon Healthy Kids Fund
shall be transferred to the Healthy Kids Safety Net Account
created under section 9 of this 2007 Act for providing grants
under section 10 of this 2007 Act.
(c) 1.52 percent of the moneys in the Oregon Healthy Kids Fund
shall be transferred to the Rural Health Care Revolving Account
created under ORS 442.480 for the purpose of providing grants
under section 12 of this 2007 Act.
(3) Notwithstanding subsection (2) of this section, if and to
the extent that the Legislative Assembly determines that the
Oregon Healthy Kids Program is fully funded, moneys in the Oregon
Healthy Kids Fund established by this section may be used, in
amounts determined by the Legislative Assembly, to improve
children's health and fund other health services. + }
SECTION 3. { + (1) Except as provided in subsection (2) of
this section, to be eligible for health insurance under the
Oregon Healthy Kids Program, a child under 19 years of age must
be uninsured for a minimum of 60 consecutive days immediately
preceding enrollment.
(2) The Department of Human Services may adopt rules specifying
exceptions to the requirement in subsection (1) of this section.
(3) A child under 19 years of age is eligible for enrollment in
the Oregon Health Plan or the Family Health Insurance Assistance
Program only if the household income of the child's family is no
more than 200 percent of the federal poverty guidelines.
(4) A pregnant woman is eligible for enrollment in the Oregon
Health Plan only if the household income of the woman's family is
no more than 250 percent of the federal poverty guidelines.
(5) The department shall adopt rules for annually renewing
enrollment in the Oregon Healthy Kids Program.
(6) The department shall adopt verification requirements to
ensure that children and pregnant women receiving health
insurance under the Oregon Healthy Kids Program are legal
residents.
(7) As used in this section:
(a) 'Health benefit plan' has the meaning given that term in
ORS 735.720.
(b) 'Health insurance' means a health benefit plan that is not
paid for with funds from Title XIX of the Social Security Act.
(c) 'Uninsured' means that a person is not enrolled in an
unsubsidized or privately funded health benefit plan. + }
SECTION 4. { + (1) The Office of Private Health Partnerships
shall administer a private health option to provide access to
private health care coverage for Oregon's children.
(2) The office shall contract with carriers to provide health
benefit plans approved under section 5 of this 2007 Act.
(3) The office shall provide financial assistance for the
private health option for a child under 19 years of age whose
family's household income is more than 200 percent but no more
than 250 percent of the federal poverty guidelines. The amount of
the financial assistance shall be determined in accordance with
subsection (4) of this section and is payable to the carrier in
the manner specified by contract.
(4) The office shall adopt rules for determining the financial
assistance to be provided under this section based upon criteria
including but not limited to household income and family size.
(5) The office shall adopt rules under which families with
household incomes that are more than 250 percent of the federal
poverty guidelines may purchase the private health option without
financial assistance from the office.
(6) As used in this section and section 5 of this 2007 Act:
(a) 'Carrier' has the meaning given that term in ORS 735.700.
(b) 'Health benefit plan' has the meaning given that term in
ORS 735.720. + }
SECTION 5. { + (1) The Office of Private Health Partnerships
must approve health benefit plans offered through the private
health option described in section 4 of this 2007 Act. To be
approved, health benefit plans must offer benefit packages
comparable to those provided under section 1 (3) of this 2007 Act
and must cover mental health, vision and dental services.
(2) Approved health benefit plans may impose cost sharing based
upon household income and family size according to standards
prescribed by the office by rule.
(3) Approved health benefit plans may not exclude coverage of
pre-existing conditions. + }
SECTION 6. { + The Private Health Option Program Account is
created in the Oregon Healthy Kids Fund. The account shall
consist of moneys in the Oregon Healthy Kids Fund that are made
available to the Office of Private Health Partnerships for the
purpose of operating the private health option. Moneys in the
account are continuously appropriated to the office to carry out
the provisions of sections 4 and 5 of this 2007 Act. Interest
earned by the account shall be credited to the Oregon Healthy
Kids Fund. + }
SECTION 7. { + (1) The Office for Oregon Health Policy and
Research shall analyze and evaluate the implementation of the
Oregon Healthy Kids Program and report its findings to the
Legislative Assembly by February 1 of each odd-numbered year.
(2) Whenever the office determines that further information is
necessary or desirable to assess the effectiveness of the Oregon
Healthy Kids Program in meeting the program's goals, the office
may conduct any further examination, including but not limited to
authorizing a full independent audit of the program. + }
SECTION 8. { + (1) The Department of Human Services shall
apply to the Centers for Medicare and Medicaid Services for the
waivers necessary to implement sections 1, 2, 3, 4, 5 and 6 of
this 2007 Act and to obtain federal financial participation for
health care coverage or services provided to children and
pregnant women through the Oregon Healthy Kids Program.
(2) The department shall adopt rules implementing sections 1, 2
and 3 of this 2007 Act as soon as practicable after receipt of
the necessary waivers. + }
SECTION 9. { + (1) The Healthy Kids Safety Net Account is
established in the State Treasury, separate and distinct from the
General Fund. Interest earned by the Healthy Kids Safety Net
Account shall be credited to the account. The Healthy Kids Safety
Net Account shall consist of moneys transferred to the account
under section 2 of this 2007 Act and moneys received by the
Department of Human Services in the form of gifts, grants,
bequests, endowments or donations.
(2) Moneys in the Healthy Kids Safety Net Account are
continuously appropriated to the Department of Human Services for
the purpose of carrying out the provisions of section 10 of this
2007 Act. + }
SECTION 10. { + (1) The Department of Human Services shall
award grants to community health centers or safety net clinics to
ensure the capacity of each grantee to provide health care
services to underserved or vulnerable populations.
(2) The department shall by rule adopt criteria for awarding
grants under this section. + }
SECTION 11. { + (1) A prepaid managed care health services
organization that contracts with the Department of Human Services
pursuant to ORS 414.630 shall reimburse a qualified community
health center or safety net clinic for a covered service provided
by the center or clinic to an enrollee of the organization
participating in a program described in section 1 (3) of this
2007 Act. The department by rule shall adopt standards for
qualifying community health centers and safety net clinics for
reimbursement under this subsection.
(2) As used in this section and section 10 of this 2007 Act, '
community health center or safety net clinic' means a nonprofit
health clinic that provides primary physical health, vision,
dental or mental health services to low-income patients without
charge or using a sliding fee scale based on the income of the
patient. 'Community health center or safety net clinic' includes
a school-based health center. + }
SECTION 12. { + Out of funds transferred under section 2 of
this 2007 Act to the Rural Health Care Revolving Account, the
Office of Rural Health shall award grants to increase access to
rural health care for children, including but not limited to
grants for:
(1) Replacement or renovation of aging rural medical facilities
and equipment;
(2) Preservation of access to local health services in rural
areas through short-term support of rural health care providers;
(3) Expansion of community health education opportunities; and
(4) Providing operational support for rural health centers that
are not federally qualified health centers. + }
SECTION 13. { + Except as otherwise provided in this section
and ORS 735.710, the Office of Private Health Partnerships and
the Department of Human Services may not disclose information
provided as part of an application for enrollment in the Oregon
Healthy Kids Program except for purposes directly connected with
the administration or evaluation of the program. + }
{ +
CIGARETTE TAX + }
SECTION 14. { + Sections 15, 16 and 19 to 23 of this 2007 Act
are added to and made a part of ORS 323.005 to 323.482. + }
SECTION 15. { + (1) Notwithstanding ORS 323.030 (2) and in
addition to and not in lieu of any other tax, every distributor
shall pay a tax upon distributions of cigarettes at the rate of
42.25 mills for the distribution of each cigarette in this state.
(2) Any cigarette for which a tax has once been imposed under
ORS 323.005 to 323.482 may not be subject upon a subsequent
distribution to the taxes imposed by ORS 323.005 to 323.482. + }
SECTION 16. { + All moneys received by the Department of
Revenue from the tax imposed under section 15 of this 2007 Act
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) 6.5 percent shall be transferred to the suspense account
created pursuant to ORS 323.455 (1) and credited in the same
manner as moneys received from the tax imposed by ORS 323.030
(1);
(2) 13 percent shall be transferred to the suspense account
created pursuant to ORS 323.457 (1) and credited in the same
manner as moneys received from the tax imposed by ORS 323.031
(1); and
(3) The balance of the moneys in the account, after the amounts
described in subsections (1) and (2) of this section are
transferred, shall be credited as follows:
(a) 4.918 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; and
(b) The remainder shall be credited to the Oregon Healthy Kids
Fund established by section 2 of this 2007 Act. + }
SECTION 17. Section 16 of this 2007 Act is amended to read:
{ + Sec. 16. + } All moneys received by the Department of
Revenue from the tax imposed under section 15 of this 2007 Act
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) 6.5 percent shall be transferred to the suspense account
created pursuant to ORS 323.455 (1) and credited in the same
manner as moneys received from the tax imposed by ORS 323.030
(1);
(2) 13 percent shall be transferred to the suspense account
created pursuant to ORS 323.457 (1) and credited in the same
manner as moneys received from the tax imposed by ORS 323.031
(1); and
(3) The balance of the moneys in the account, after the amounts
described in subsections (1) and (2) of this section are
transferred, shall be credited as follows:
(a) { - 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; and
(b) The remainder shall be credited to the Oregon Healthy Kids
Fund established by section 2 of this 2007 Act.
SECTION 18. { + The amendments to section 16 of this 2007 Act
by section 17 of this 2007 Act become operative on July 1,
2009. + }
SECTION 19. { + (1) Notwithstanding ORS 323.030 (3) and in
addition to and not in lieu of any other tax, for the privilege
of holding or storing cigarettes for sale, use or consumption, a
floor tax is imposed upon every dealer at the rate of 42.25 mills
for each cigarette in the possession of or under the control of
the dealer in this state at 12:01 a.m. on January 1, 2008.
(2) The tax imposed by this section is due and payable on or
before January 21, 2008. 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 January 21, 2008, 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 January 1, 2008, 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 20. { + Notwithstanding ORS 323.030 (3) and in
addition to and not in lieu of any other tax, for the privilege
of distributing cigarettes as a distributor and for holding or
storing cigarettes for sale, use or consumption, a floor tax and
cigarette adjustment indicia tax is imposed upon every
distributor in the amount of $1.05625 for each Oregon cigarette
tax stamp bearing the designation '25,' in the amount of 84.5
cents for each Oregon cigarette tax stamp bearing the designation
'20,' in the amount of 42.25 cents for each Oregon cigarette tax
stamp bearing the designation '10' and in the amount of 4.225
cents for each Oregon cigarette tax stamp bearing the designation
'1 ' that is affixed to any package of cigarettes in the
possession of or under the control of the distributor at 12:01
a.m. on January 1, 2008. + }
SECTION 21. { + (1) Every distributor must take an inventory
as of 12:01 a.m. on January 1, 2008, 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 January 21, 2008, 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 January 1, 2008; and
(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 January 1,
2008.
(3) The amount of tax required to be paid with respect to the
affixed Oregon cigarette tax stamps shall be computed pursuant to
section 20 of this 2007 Act 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 January 1,
2008, will not be refunded or credited to a distributor. + }
SECTION 22. { + All moneys received by the Department of
Revenue from the taxes imposed by sections 19 and 20 of this 2007
Act 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, the net amount of revenues remaining shall be
distributed as prescribed in section 16 of this 2007 Act. + }
SECTION 23. { + Amounts necessary to pay the expenses incurred
by the Department of Revenue and to reimburse the Oregon State
Police and the Department of Justice for the administration and
enforcement of ORS 323.005 to 323.482 are continuously
appropriated to the Department of Revenue from the suspense
accounts described in sections 16 and 22 of this 2007 Act. + }
SECTION 24. { + Section 23 of this 2007 Act is repealed July
1, 2009. + }
SECTION 25. ORS 323.457, as amended by section 5e, chapter 804,
Oregon Laws 2003, and section 110, chapter 94, Oregon Laws 2005,
is amended to read:
323.457. (1) Moneys received under ORS 323.031 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:
(a) { - 29.37/30 - } { + 47/50 + } of the moneys shall be
credited to the Oregon Health Plan Fund established under ORS
414.109;
(b) { - 0.14/30 - } { + 1/50 + } of the moneys are
continuously appropriated to the Oregon Department of
Administrative Services for distribution to the cities of this
state;
(c) { - 0.14/30 - } { + 1/50 + } of the moneys are
continuously appropriated to the Oregon Department of
Administrative Services for distribution to the counties of this
state; { + and + }
(d) { - 0.14/30 - } { + 1/50 + } of the moneys are
continuously appropriated to the Department of Transportation to
be distributed and transferred to the Elderly and Disabled
Special Transportation Fund established under ORS
391.800 { + . + } { - ; and - }
{ - (e) 0.21/30 of the moneys shall be credited to the
Tobacco Use Reduction Account established under ORS 431.832. - }
(2)(a) Moneys distributed to cities and counties under this
section shall be distributed to each city or county using the
proportions used for distributions made under ORS 323.455.
(b) Moneys shall be distributed to cities, counties and the
Elderly and Disabled Special Transportation Fund at the same time
moneys are distributed to cities, counties and the Elderly and
Disabled Special Transportation Fund under ORS 323.455.
{ +
TOBACCO PRODUCTS TAX + }
SECTION 26. ORS 323.505 is amended to read:
323.505. (1) A tax is hereby imposed upon the distribution of
all tobacco products in this state. The tax imposed by this
section is intended to be a direct tax on the consumer, for which
payment upon distribution is required to achieve convenience and
facility in the collection and administration of the tax. The tax
shall be imposed on a distributor at the time the distributor
distributes tobacco products.
(2) The tax imposed under this section shall be imposed at the
rate of:
(a) { - Sixty-five - } { + Ninety-five + } percent of the
wholesale sales price of cigars, but not to exceed 50 cents per
cigar; or
(b) { - Sixty-five - } { + Ninety-five + } percent of the
wholesale sales price of all tobacco products that are not
cigars.
(3) If the tax imposed under this section does not equal an
amount calculable to a whole cent, the tax shall be equal to the
next higher whole cent. However, the amount remitted to the
Department of Revenue by the taxpayer for each quarter shall be
equal only to 98.5 percent of the total taxes due and payable by
the taxpayer for the quarter.
(4) No tobacco product shall be subject to the tax if the base
product or other intermediate form thereof has previously been
taxed under this section.
SECTION 27. { + Sections 1, 2, 3, 8 and 11 of this 2007 Act
are added to and made a part of ORS chapter 414. + }
SECTION 28. { + Sections 4, 5 and 6 of this 2007 Act are added
to and made a part of ORS chapter 735. + }
SECTION 29. { + Section 12 of this 2007 Act is added to and
made a part of ORS 442.470 to 442.507. + }
SECTION 30. { + Sections 15 and 16 of this 2007 Act apply to
cigarette distributions occurring on or after January 1,
2008. + }
SECTION 31. { + The amendments to ORS 323.457 by section 25 of
this 2007 Act become operative on January 1, 2008. + }
SECTION 32. { + The amendments to ORS 323.505 by section 26 of
this 2007 Act apply to tobacco products tax reporting periods
beginning on or after January 1, 2008. + }
SECTION 33. { + The unit captions used in this 2007 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2007 Act. + }
{ +
REFERRAL TO VOTERS + }
SECTION 34. { + This 2007 Act shall be submitted to the people
for their approval or rejection at a special election held
throughout this state as provided in chapter ___, Oregon Laws
2007 (Enrolled ___ Bill ___) (LC ___). + }
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