Item 3: Ratification of Unanimous and Non-Uanimous IGR Actions

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URL: http://www.leg.state.or.us/11reg/measpdf/hb2500.dir/hb2533.intro.pdf Contact Respondent Dept Updated Priority Recommendation Larry Hill CS-FIN 01/20/2011 -- Monitor Comments: HB 2533 must be carefully monitored to determine whether it would increase or decrease revenue to the City from the state cigarette tax. Amendments should be pursued if necessary to make the bill favorable to cities. Would significantly reduce the percentage share of cigarette tax revenue under ORS 323.030 distributed to cities from 3.45% to 1.93%. It would also impose a new one-time floor tax of over 90 mills per cigarette on distributors and retailers of cigarettes on stock on hand as of January 1, 2012. Finally it would impose an additional cigarette stamp tax with the amount of the tax based on the type of stamp. NO fiscal analysis is available yet on this bill. It isn't possible for me at this time to determine what the net effect of these changes would be on revenue to be received by the City of Eugene from state cigarette tax revenue distributions. It is very important that the share of cigarette tax revenue currently going to cities not be reduced, and it should be increased if at all possible. The cigarette tax, when it was approved by voters in 1967,was $0.04 per pack, with 50% of the tax designated for property tax relief and 50% to be distributed to cities and counties. Since then, the amount of tax on cigarettes has increased but cities proportionate share of the tax revenue has shrunk, from 33% to just 1.7% of the total tax (a second penny was added for cities in 1986). The current tax rate is $1.18 per pack of 20 cigarettes. Generally, the tax is paid through the use of tax stamps that are purchased by Oregon licensed cigarette distributors. Revenue from the tax is allocated as follows: $0.22 to the State General Fund (18.64%), $0.86 to the Oregon Health Plan (72.66%), $0.02 to cities (1.93%), $0.02 to counties (1.93%), $0.02 to the Oregon Department of Transportation for transportation services to the elderly and disabled (1.93%), and $0.03 to the Tobacco Use Reduction Account (2.9%). The statutory authorization for this distribution is ORS 323.455. Revenues are paid to cities on a per capita basis. Cities may use their share for general government purposes, without program restrictions on their use. In FY11 the City of Eugene expects to receive $211,500 from the state cigarette tax. HB 2552 Relating Clause: Relating to compliance with the tax laws of the State of Oregon; declaring an emergency. Title: Requires contracting agency to verify that person that enters into public contract with contracting agency has paid all taxes due and otherwise complied with tax laws of this state. Sponsored by: Introduced and printed pursuant to House Rule 12.00. Presession filed (at the request of House Interim Committee on Revenue) URL: http://www.leg.state.or.us/11reg/measpdf/hb2500.dir/hb2552.intro.pdf 16