Can a city use a zoning rule against 'adult businesses' to keep video lottery machines out of certain establishments?

Plain-English summary

The City of Grants Pass had a zoning chapter aimed at "adult businesses" — defined as places that excluded anyone under 21. Section 14.640 of the Development Code prohibited a non-conforming adult business (one that did not meet the city's location and size criteria) from expanding its "adult uses" to include new ones. Because state law (ORS 461.217) lets video lottery terminals sit only in establishments closed to minors, every video lottery host in the city was, by definition, an "adult business." That meant the ordinance effectively blocked a tavern that was already serving alcohol from later adding video lottery if its location did not meet the code's siting rules.

Lottery Director Brenda Rocklin asked the Attorney General whether ORS 461.030 preempted the ordinance. AG Hardy Myers concluded that it did, at least to the extent the ordinance would block video lottery sales.

The opinion walked through Oregon's home rule framework from LaGrande/Astoria v. PERB, conceded that Grants Pass had charter authority to enact the ordinance, and then turned to preemption. ORS 461.030(1) makes the lottery chapter "applicable and uniform throughout the state" and forbids local laws "in conflict with" it. ORS 461.030(2) goes further and bars any state or local law that imposes "any penalty, disability or prohibition for the manufacture, transportation, distribution, advertising, possession or sale of any lottery tickets or shares."

The hinge of the analysis was whether video lottery counts as the sale of a "ticket or share." The opinion concluded yes. A "ticket" is a tangible token. A "share" is intangible: an opportunity to win in a game that does not issue a token. Lottery's own administrative rule, OAR 177-010-0003, said the same thing. Because Article XV, § 4(4)(c) and ORS chapter 461 only let the Lottery operate games whose play is the sale of tickets or shares, video lottery had to be a "share" or the Lottery would lack constitutional authority to run it.

Section 14.640 therefore imposed a "prohibition" on the sale of "shares" of the state lottery in certain locations, which fell squarely within the kind of local law ORS 461.030(2) forbade. The ordinance was preempted as it applied to video lottery distribution and sales.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did Grants Pass have the authority to write this ordinance in the first place?
A: Yes. The opinion concluded that the city's broad home rule charter and Article IV, § 1(5) and Article XI, § 2 of the Oregon Constitution gave it ample power to adopt zoning rules on local health, safety, and welfare matters. The problem was not authority. It was conflict with a state statute that occupied the field.

Q: What standard does Oregon use for state preemption of local law?
A: The opinion applied the framework from LaGrande/Astoria v. PERB. A court asks first whether the local enactment was authorized, then whether it can operate concurrently with state law or whether the legislature meant the state law to be exclusive. Express preemption language in the statute, especially the phrase "no local government shall," is treated as a clear declaration of preemptive intent.

Q: Why does it matter whether video lottery is a "ticket" or a "share"?
A: ORS 461.030(2) preempts local laws that penalize, disable, or prohibit the "manufacture, transportation, distribution, advertising, possession or sale of any lottery tickets or shares." If video lottery games were neither, ORS 461.030(2) would not reach them. The opinion concluded that video lottery is a "share" and therefore inside the preemption.

Q: Where does the word "share" come from in lottery law?
A: The opinion noted that ORS 461.010(5) defines a lottery game as a procedure where prizes are distributed among persons who pay (or unconditionally agree to pay) for "tickets or shares." Article XV, § 4(4)(c) (added by Ballot Measure 4 in 1984) uses the same phrase. The Lottery's own rule, OAR 177-010-0003(15), defines "share" as an opportunity to win a prize in a game that does not use certificates or tokens, "such as in video lottery games."

Q: Could the city still regulate adult businesses generally?
A: The opinion expressly limited its preemption holding to video lottery. The AG did not address whether other features of the adult-business ordinance might be preempted by other statutes or invalid for other reasons.

Q: Does this mean cities have no zoning control over video lottery at all?
A: The AG concluded that any city ordinance that imposes a "penalty, disability or prohibition" on the sale of lottery shares falls inside ORS 461.030(2)'s preemption. A city zoning code that incidentally affected an establishment for non-lottery reasons (like a generic occupancy rule) might survive, but a rule that singled out or effectively blocked video lottery placement would not.

Background and statutory framework

Oregon voters created the State Lottery in 1984 with Ballot Measures 4 and 5. Measure 4 amended the Constitution to authorize the Lottery; Measure 5 enacted ORS chapter 461, the Lottery's operational statute. Both measures contemplated games that involved the sale of "tickets or shares," and Measure 4 forbade games that dispense coins or currency directly from a video terminal — a structural sign that video games were always anticipated to count as one of the two.

ORS 461.030 is the Lottery Act's preemption clause. Subsection (1) declares the chapter uniform statewide and forbids local laws that conflict with it. Subsection (2) is broader: it bars any state or local law "providing any penalty, disability or prohibition for the manufacture, transportation, distribution, advertising, possession or sale of any lottery tickets or shares."

The opinion used the PGE v. Bureau of Labor and Industries methodology to interpret both statute and ordinance, then resolved the technical question about whether "share" was an exact, inexact, or delegative term under the Springfield Education Association taxonomy. It concluded "share" was inexact, deferred to the Lottery's interpretation in OAR 177-010-0003, and found that interpretation consistent with the statutory text.

Grants Pass's adult-business code (Article 14, §§ 14.600 to 14.650, plus the definitions in Article 30, all enacted in 1994) defined adult businesses as those that excluded anyone under 21 and listed siting requirements (zoning location, distance from schools and parks, building size). Section 14.640 froze non-conforming adult businesses at their existing scope of "adult uses." Because video lottery hosting required a 21-and-up establishment, adding video lottery would always be an expansion of an "adult use" under the code.

Citations and references

Constitutional provisions: Or. Const., Art. IV, § 1(5); Art. XI, § 2; Art. XV, § 4(4)(c) and (d).

Statutes and rules:
- ORS 461.010(5), (7); 461.030(1)–(2); 461.200; 461.210; 461.215; 461.217; 461.220; 461.230(2); 461.310; 461.500(1); 461.510(5)
- OAR 177-010-0003(15)–(16) (Lottery's definitions of share and ticket)

Cases on home rule and preemption:
- LaGrande/Astoria v. PERB, 281 Or. 137 (1978)
- Jarvill v. City of Eugene, 289 Or. 157 (1980); City of Eugene v. Miller, 318 Or. 480 (1994); Burt v. Blumenaur, 299 Or. 55 (1985)
- Ashland Drilling, Inc. v. Jackson County, 168 Or. App. 624 (2000); AT&T Communications of the Pacific Northwest, Inc. v. City of Eugene, 177 Or. App. 379 (2001); Boytano v. Fritz, 321 Or. 498 (1995)

Cases on statutory and ordinance interpretation:
- PGE v. BOLI, 317 Or. 606 (1993); Ecumenical Ministries v. Oregon State Lottery Comm'n, 318 Or. 551 (1994)
- Recovery House VI v. City of Eugene, 156 Or. App. 509 (1998); Springfield Education Assn. v. School District, 290 Or. 217 (1980); Coast Security Mortgage Corp. v. Real Estate Agency, 331 Or. 348 (2000); State v. Allison, 143 Or. App. 241 (1996); State v. Tschantre, 182 Or. App. 313 (2002); Lincoln Loan Co. v. City of Portland, 317 Or. 192 (1993)

Source

• Index page: https://www.doj.state.or.us/oregon-department-of-justice/office-of-the-attorney-general/attorney-general-opinions/
• Original PDF: https://www.doj.state.or.us/wp-content/uploads/2003/09/op2003-2.pdf

Original opinion text

HARDY MYERS

PETER D. SHEPHERD

Attorney General

Deputy Attorney General

DEPARTMENT OF JUSTICE
GENERAL COUNSEL DIVISION

September 12, 2003

Brenda Rocklin, Director
Oregon State Lottery
P.O. Box 12649
Salem, OR 97309
Re:

Opinion Request OP-2003-2

Dear Ms. Rocklin:
You ask whether ORS 461.030 preempts the City of Grants Pass Development Code
Ordinance 14.640 as that ordinance relates to video lottery machines. We conclude that
ORS 461.030 preempts the Grants Pass ordinance as it applies to sales and distribution of video
lottery provided in establishments otherwise subject to the ordinance.
Discussion
The issue is whether ORS 461.030 preempts local regulation affecting the manufacture,
transportation, distribution, advertising, possession or sale of any lottery tickets or shares within
the State of Oregon.1/ Although your question focuses on section 14.640 of the Grants Pass
Development Code, several provisions of that code are relevant.2/ Article 30 of the code defines
“adult use” and “adult business.”3/ Article 14 of the code “establishes an overlay area where
adult businesses are not permitted.” GRANTS PASS, OR., DEVELOPMENT CODE, section 14.610
(1994). Section 14.6404/ provides that an adult business that does not conform to the
requirements of sections 14.600 to 14.650 cannot expand its adult uses. 5/
Video Lottery is an “adult use” in an “adult business” as those terms are defined in the
Grants Pass Development Code.6/ Consequently, section 14.640 of that code purports to regulate
placement of video lottery terminals and, hence, video lottery sales, within the City of Grants
Pass.
The Oregon Supreme Court has articulated the framework for evaluating questions
concerning state preemption of local regulation. See LaGrande/Astoria v. PERB, 281 Or 137,
576 P2d 1204 (1978). Under this framework, the determination of whether section 14.640 of the
Grants Pass Development Code is preempted by ORS 461.030 requires analysis of two issues.
They are, first, whether the enactment of section 14.640 is within the authority of the city under
its charter and, second, whether that authority is preempted by state law. 281 Or at 142. Upon a
determination that enactment of the local ordinance is authorized, the analysis turns to whether
and to what extent the ordinance conflicts with state law.

Brenda Rocklin, Director
September 12, 2003
Page 2

[T]he first inquiry must be whether the local rule in truth is incompatible with the
legislative policy, either because both cannot operate concurrently or because the
legislature meant its law to be exclusive. It is reasonable to interpret local
enactments, if possible, to be intended to function consistently with state laws,
and equally reasonable to assume that the legislature does not mean to displace
local civil or administrative regulation of local conditions by a statewide law
unless that intention is apparent.
Id. at 148-49 (footnote omitted). Each issue is addressed in turn, below.
1.

City Authority to Enact Ordinance

In general, under constitutional “home rule” provisions, cities are permitted to determine
the organization and powers of local governments without the need to obtain authority from the
state legislature. Or Const, Art IV, § 1(5) and Art XI, § 2; Jarvill v. City of Eugene, 289 Or 157,
168-69, 613 P2d 1, cert den 449 US 1013, 101 S Ct 572, 66 L Ed2d 472 (1980). Article XI,
section 2 of the Oregon Constitution provides that “[t]he legal voters of every city and town are
hereby granted power to enact and amend their municipal charter, subject to the Constitution and
criminal laws of the State of Oregon.” Additionally, Article IV, section 1(5) provides, in part:
The initiative and referendum powers reserved to the people * * * are further
reserved to the qualified voters of each municipality and district as to all local,
special and municipal legislation of every character in or for their municipality or
district.
The “home rule” authority of local governments enables them to enact reasonable regulations to
further local interests with respect to public health, safety, and welfare. City of Eugene v.
Miller, 318 Or 480, 491 n 12, 871 P2d 454 (1994).
The City of Grants Pass Charter broadly confers on the city all powers consistent with
constitutional home rule provisions:
The city shall have all powers which the constitutions, statutes, and common law
of the United States and of this state expressly or impliedly grant or allow
municipalities, as fully as though this charter specifically enumerated each of
these powers. * * * The charter shall be broadly construed to the end that the city
shall have all powers necessary or convenient for the conduct of its municipal
affairs, including all powers that cities may assume pursuant to state laws and to
the municipal home rule provisions of the state constitution.
City of Grants Pass Charter, ch II, §§ 1-2 (1977). Enactments by local governments of
reasonable regulations on matters of local health, safety, and welfare, are generally valid unless a
court determines that the local regulation conflicts with state law or is clearly intended to be
preempted. Ashland Drilling, Inc. v. Jackson County, 168 Or App 624, 634, 4 P3d 748, rev den
331 Or 429, 26 P3d 148 (2000). According to the Oregon Supreme Court:

Brenda Rocklin, Director
September 12, 2003
Page 3

In recent times, the judicial demand for explicit expressions of authority
and a recognition of only attendant authorities “necessarily implied” by those
expressed has given way to an interpretation that local governments have broad
powers subject only to constitutional or preemptive statutory prohibitions.
Burt v. Blumenaur, 299 Or 55, 61, 699 P2d 168 (1985). Here, the City of Grants Pass had the
necessary authority to enact the ordinance in question, as the ordinance affects a matter generally
within the City’s broad powers under its charter and pursuant to constitutional home rule
provisions. Consequently, our inquiry turns to whether the exercise of that authority is
preempted by ORS 461.030.7/
2.

State Preemption of Local Regulation

Under the framework prescribed by LaGrande/Astoria, the next question is whether the
legislature intended to preempt the type of ordinance at issue, either by indicating intent that the
state law be exclusive or by virtue of the fact that the local ordinance is incompatible with state
law. 281 Or at 148-49. The intention to preempt is apparent if it is expressly stated or otherwise
clearly manifested in the statutory language. Ashland, 168 Or App at 634. Although a statute
need not use the word “preempt” to manifest an intention to preclude local regulation, it is
generally required that the preemptive intent be clearly stated. AT&T Communications of the
Pacific Northwest, Inc. v. City of Eugene, 177 Or App 379, 395, 35 P3d 1029 (2001), rev den
334 Or 491 52 P3d 1056 (2002). The extent of any preemption also is measured by the statutory
language. Boytano v. Fritz, 321 Or 498, 505-07, 901 P2d 835 (1995). If the statutory language
reveals an express or clearly manifested intention that the state law be exclusive, the analysis
ends there. LaGrande/Astoria, 281 Or at 148. If, however, there is no such manifestation of
intent to preempt, it is necessary to examine whether an ordinance can “operate concurrently”
with state law. Id.
Here, we ask whether ORS 461.030 expressly or otherwise preempts the City of Grants
Pass ordinance. To answer this question, we examine the text and context of ORS 461.030,
because text and context is considered to be the best evidence of the legislature’s intent. PGE v.
Bureau of Labor and Industries, 317 Or 606, 610, 859 P2d 1143 (1993). As an aid to statutory
interpretation, we also may consider rules of construction that bear directly on how to read the
text, including that words of common usage typically should be given their plain, natural, and
ordinary meaning. 317 Or at 611. If, after consideration of the text and context of a statute, the
intent of the legislature is clear, the analysis is complete. Id.
ORS 461.030(1) provides that “chapter [461] shall be applicable and uniform throughout
the state and all political subdivisions and municipalities therein, and no local authority shall
enact any ordinances, rules or regulations in conflict with the provisions hereof.” The plain
language of this provision evinces a legislative intent to preempt local law to some extent. See
AT&T Communications of the Pacific Northwest, Inc., 177 Or App at 395 (“ORS 461.030(1)
* * * makes the legislature’s preemptive intentions quite clear”). The extent of preemption under
ORS 461.030(1) is clearly expressed to extend to local laws “in conflict” with the provisions of

Brenda Rocklin, Director
September 12, 2003
Page 4

Chapter 461. ORS 461.030(2) extends the preemptive reach of this statute to “[a]ny other state
or local law or regulation providing any penalty, disability or prohibition for the manufacture,
transportation, distribution, advertising, possession or sale of any lottery tickets or shares.” Read
in tandem, these two subsections express the intent for state lottery laws to be exclusive, insofar
as those laws relate to the “manufacture, transportation, distribution, advertising, possession or
sale of any lottery tickets or shares.” See Ashland, 168 Or App at 637 (legislature may reserve
for its exclusive control certain aspects of a particular subject matter). Both subsections contain
express language indicative of preemptive intent. See AT&T Communications, 177 Or App at
396 (the phrase “no local government shall” is a declaration of preemptive intent).
At issue here is a local regulation that purports to prohibit the sale of video lottery in
certain “adult businesses,” as that term is defined in the Grants Pass ordinance. While the
preemptive intent of ORS 461.030 is clear as it relates to local laws or regulations that, among
other things, provide any penalty, disability or prohibition for the sale of any lottery tickets or
shares, it is not clear on the face of the statute whether the sale of video lottery is included in the
“sale of any lottery tickets or shares.” It is, therefore, necessary to determine whether video
lottery games involve lottery tickets or shares.
ORS 461.030 was adopted by voter initiative in the 1984 general election as part of
Ballot Measure 5. To interpret a statute adopted by initiative, we seek to determine the voters’
intent by applying the methodology set forth in PGE v. Bureau of Labor and Industries, 317 Or
at 612, n. 4 (PGE methodology applies not only to statutes enacted by the legislature, but also to
statutes adopted by initiative); Ecumenical Ministries v. Oregon State Lottery Commission, 318
Or 551, 560, 871 P2d 106 (1994). Under PGE, a review of the text and context may include
other provisions of the same statute, and related statutes. PGE, 317 Or at 610-611; Ecumenical
Ministries, 318 Or at 560. Because the voters adopted Ballot Measure 4, a companion ballot
measure amending Article XV, Section 4 of the Oregon Constitution, at the same time as
Measure 5, Measure 4 is part of the context of Measure 5. Ecumenical Ministries, 318 Or at
562.
The ordinary meaning of the word “lottery” is “a scheme for the distribution of prizes by
lot or chance; esp: a scheme by which prizes are distributed to the winners among those persons
who have paid for a chance to win them usu. as determined by the numbers on tickets as drawn
at random (as from a lottery wheel)”. WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY at
1338 (Unabridged 1993). ORS 461.010(5) contains a similar definition of “Lottery game”:
any procedure authorized by the commission whereby prizes are distributed
among persons who have paid, or unconditionally agreed to pay, for tickets or
shares which provide the opportunity to win such prizes.
Throughout chapter 461 the words “tickets” and “shares” are used in the same phrase,
connected by the disjunctive “or”.8/ The use of the word “or” in the phrase makes it clear that a
ticket is not a share. See Recovery House VI v. City of Eugene, 156 Or App 509, 512, 965 P2d
488 (1998) (the words “and” and “or”, as used in statutes, are not interchangeable, but rather are
strictly of a conjunctive or disjunctive nature). “Ticket” is commonly defined as “a certificate,

Brenda Rocklin, Director
September 12, 2003
Page 5

evidence, or token of a right (as of admission to a place of assembly, of passage in a public
conveyance, of debt, or of a chance) * * * a lottery [ticket] * * *.” WEBSTER’S at 2389-2390.
“Share” is defined as “a portion belonging to, due to, or contributed by an individual.” Id. at
2087. Read in conjunction, these definitions indicate that a lottery ticket and a lottery share each
separately represent an opportunity or chance to win a prize that is purchased by a player. A
ticket is a tangible item, “a certificate, evidence, or token,” while a share likely is intangible.
Indeed, Lottery is required to print certain information on tickets, see ORS 461.210; 461.220(2),
but no such requirements apply to shares. Moreover, Lottery is required to develop “security
measures that are designed to prevent the redemption of fraudulent tickets,” see ORS 461.210(1),
but is not required to do so with shares. Therefore, although video lottery games do not issue
any form of receipt to the player at the time he or she places a wager, the player may be said to
have an interest, or a share, in winning a prize.
This reading of the text is consistent with Ballot Measure 4 and related lottery statutes.
Ballot Measure 4 authorized Lottery to operate
any game procedure authorized by the commission, except parimutuel racing,
social games, and the games commonly known in Oregon as bingo or lotto,
whereby prizes are distributed using any existing or future methods among adult
persons who have paid for tickets or shares in that game; provided that in lottery
games utilizing computer terminals or other devices, no coins or currency shall
ever be dispensed directly to players from such computer terminals or devices.
Ballot Measure 4, § 4, codified at Or Const Art XV § 4(4)(c). The phrase providing that games
involving video devices may not dispense coins or currency modifies the clause authorizing
Lottery to operate games that sell tickets or shares. Moreover, this provision and ORS chapter
461 presuppose that any game operated by Lottery necessarily involves the sale of tickets or
shares. See ORS 461.200 (“[T]he director shall begin public sales of tickets or shares.”); ORS
461.010(7) (lottery game retailer is “a person with whom the lottery commission has contracted
for the purpose of selling tickets or shares in lottery games to the public.”); ORS 461.220(1)
(Lottery must adopt rules that specify the number and value prizes of tickets or shares in each
lottery game); ORS 461.310 (commission to determine compensation for retailers for sales of
lottery tickets or shares).
We are permitted to rest on a “first level” text analysis only if the text permits a single
construction and all other possible interpretations are “wholly implausible”. State v. Allison, 143
Or App 241, 247, 923 P2d 1224, rev den 324 Or 487, 930 P2d 852 (1996), citing Owens v.
MVD, 319 Or 259, 268, 875 P2d 463 (1994) and Carroll v. Boise Cascade Corp., 138 Or App
610, 616, 910 P2d 1111 (1996). The only plausible interpretation of “lottery tickets or shares” is
that “shares” refers to video lottery. Lottery is authorized to operate any game procedure
involving the purchase of tickets or shares, and at the same time has authority to operate games
using video lottery terminals. See Or Const, Art XV, § 4(4)(c); ORS 461.010(5); ORS 461.215;
ORS 461.230(2). If video lottery games do not involve the sale of a ticket or share, Lottery
would not have constitutional authority to operate them. This result would be contrary to the
voters’ intent as evidenced by their express condition that games using computer terminals shall

Brenda Rocklin, Director
September 12, 2003
Page 6

not directly dispense coins or currency. Or Const, Art XV, § 4(4)(c). Moreover, Ballot
Measures 4 and 5 create a regulatory framework based on the assumption that all games involve
the sale of tickets or shares. Lottery must pay all prizes and expenses from the sale of tickets or
shares and turn the net proceeds over to the Legislative Assembly. Or Const Art XV, § 4(4)(d);
ORS 461.510(5). At least 84 percent of the revenue from the sale of tickets or shares must be
returned to the public as prizes or revenue benefiting the public purpose. Or Const Art XV, §
4(4)(d); ORS 461.500(1). Conversely, no more than 16 percent may be spent on Lottery’s
administrative expenses. If video lottery games do not use tickets or shares, these limits on
expenditures would not apply to video lottery revenue.
Lottery has interpreted “share” to include the opportunity to win a prize in a video lottery
game. By administrative rule, Lottery defines “share” as “an opportunity to win a prize in a
Lottery game that does not use certificates or tokens, such as in video lottery games.” OAR 177010-0003(15). “Ticket” is defined as “a certificate or token of the opportunity to win a prize in a
Lottery game.” OAR 177-010-0003(16).
When an agency's interpretation of a provision of law is at issue, the standard of review
depends upon whether the phrase at issue is an exact term, an inexact term, or a delegative term.
Springfield Education Assn. v. School District, 290 Or 217, 223, 621 P2d 547 (1980); Coast
Security Mortgage Corp. v. Real Estate Agency, 331 Or 348, 353-54, 15 P3d 29 (2000). “Exact
terms,” such as “rodent” and “30 days” have relatively precise meanings. Springfield, 290 Or at
223-24. “Inexact terms,” such as “escrow agent” and “condition of employment” are less
precise; they embody a complete expression of legislative meaning, but that meaning may not be
obvious. Springfield, 290 Or at 224-228; Coast Sec., 331 Or at 354. “Delegative terms” express
incomplete legislative meaning that the agency is authorized to complete. Springfield, 290 Or at
228.
“Lottery tickets or shares” is an inexact phrase. The phrase embodies a complete
expression of legislative policy, yet application of the phrase may be imprecise. With an
“inexact term,” we review the agency’s interpretation for consistency with legislative intent.
Coast Sec., 331 Or at 354; LegalClub.com v. DCBS, 182 Or App 494, 504, 50 P3d 1196 (2002).
Lottery expressly includes video lottery in its definition of “share”, which is consistent with the
text and context analysis of ORS 461.030 set forth above.
The only remaining question, then, is whether section 14.640 of the Grants Pass code
falls within the limits of prohibited local regulation under ORS 461.030. In other words, does
the Grants Pass ordinance provide a penalty for, disable, or prohibit the manufacture,
transportation, distribution, advertising, possession or sale of any lottery tickets or shares.
To analyze whether section 14.640 of the Grants Pass code regulates an activity that is
within the state’s exclusive control under ORS 461.030, it is necessary to analyze the meaning
and intent of that section. The same rules that govern the construction of statutes apply to the
construction of municipal ordinances. State v. Tschantre, 182 Or App 313, 319, 50 P3d 1174
(2002); State v. Moore, 174 Or App 94, 98-100, 25 P3d 398 (2001); and Lincoln Loan Co. v.
City of Portland, 317 Or 192, 199, 855 P2d 151 (1993). The analysis starts with the text of the

Brenda Rocklin, Director
September 12, 2003
Page 7

ordinance and also may consider the context in which it occurs. See Moore, 174 Or App at 9899. If the legislative body’s intent is clear based on the text and context of the ordinance, the
analysis ends. Lincoln Loan Co., 317 Or at 192.
To determine the meaning of section 14.640 of the Grants Pass ordinance, we examine its
component parts. As discussed above, section 14.640 of the Grants Pass ordinance provides that an
adult business that does not conform to the requirements contained in sections 14.600-14.650 of the
code cannot expand its adult uses – those uses that are not accessible to persons under 21 years of
age. GRANTS PASS, OR., DEVELOPMENT CODE, art. 14, § 14.640 (1994). An “adult business” is one
that prohibits admission to persons less than 21 years of age and an “adult use” is any use conducted
on the premises of an adult business in an area where persons under 21 years of age are not allowed.
Id., ARTICLE 30. Video lottery qualifies as an adult use. See note 6. Next, under its plain language,
section 14.640 of the ordinance applies only to adult businesses that do not conform to the criteria
in sections 14.600-14.650 of the code. Finally, those non-conforming businesses are prohibited
from expanding the current adult uses in their businesses to include other types of adult uses.
The text of this ordinance is clear – non-conforming adult businesses may continue adult
uses present at the time the ordinance was enacted, but cannot expand their businesses to include
other adult uses. For example, at the time the ordinance was enacted, a tavern that does not have
video lottery, but serves alcohol and is, thus, closed to minors, that is located 1000 feet or less from
a public library, does not conform to section 14.630(2)c.2. See note 5. Under the ordinance, the
tavern can continue to serve alcohol, but cannot obtain and sell video lottery. Because the
ordinance prohibits video lottery sales in these circumstances, it regulates an area reserved
exclusively to the state under ORS 461.030. Thus, we conclude that section 14.640 of the Grants
Pass ordinance, as it relates to distribution and sales of video lottery, is preempted by ORS 461.030.
The legal opinions stated in this letter of advice are given solely for your use and benefit.
The Department of Justice does not act as legal counsel to cities and counties. Those local
governments are entitled to seek and rely upon advice from their own counsel.
Sincerely,

Donald C. Arnold
Chief Counsel
General Counsel Division
DCA:SNR:KLK:tjh:naw/GENF1319
1/

ORS 461.030 provides, in relevant part:
(1)

This chapter shall be applicable and uniform throughout the state and all political
subdivisions and municipalities therein, and no local authority shall enact any
ordinances, rules or regulations in conflict with the provisions hereof.

Brenda Rocklin, Director
September 12, 2003
Page 8

(2)

Any other state or local law or regulation providing any penalty, disability or prohibition
for the manufacture, transportation, distribution, advertising, possession or sale of any
lottery tickets or shares shall not apply to the tickets or shares of the state lottery. The
gambling laws of the State of Oregon shall not apply to lottery tickets or shares, or to the
operation of the state lottery established by the Constitution of the State of Oregon and
this chapter.
(Emphasis added.)

2/

The City of Grants Pass initially adopted the amendments restricting the use and operation of adult
businesses at issue here in 1994. Some of the provisions have since been revised, but the genesis of your
question is the 1994 amendments.
3/

The definitions are:
ADULT BUSINESS. Any person, group, firm, business, or organization (except nonprofit corporations which are not open to the general public) which prohibits admission to
all or a portion of the premises to any persons younger than 21 years of age.
ADULT USE. A use of whatever character, conducted on the premises of an adult
business, which use is conducted in the area in which any persons under 21 years of age
are prohibited.

GRANTS PASS, OR., DEVELOPMENT CODE, art. 30 (1994).
4/

Section 14.640 provides:
MODIFICATION OF AN ADULT USE IN A NON-CONFORMING ADULT
BUSINESS. An adult business which, at the time of adoption of 14.600-14.650, does
not conform to the criteria contained therein, shall be governed by the provisions of
Article 15 of the Development Code except that the current adult use may not be
expanded to include other types of uses which by law are not accessible by persons of
any age group under 21 years of age. Any such modification of the adult use shall result
in automatic loss of the rights under Article 15 and shall cause the adult business to be in
violation of Article 14.

GRANTS PASS, OR., DEVELOPMENT CODE, art. 14, § 14.640 (emphasis added).
5/

Section 14.620 creates specific permit requirements for adult business and section 14.630 sets forth
additional criteria for permit approval, as follows:
(1)

a.

The adult business is located in a Riverfront Tourist Commercial Zone
and has 10,000 or more square feet of covered and enclosed building
space open to the public; or

b.

The adult business is located more than 200 feet from any R-1, R-2, R-3,
or R-4 residential zones (measured in a straight line from the closest edge
of the property line on which the business is located to the closest edge
of property in the residential zone); and

Brenda Rocklin, Director
September 12, 2003
Page 9

(2)

a.

The adult business is located in a Riverfront Tourist Commercial Zone
and has 10,000 or more square feet of covered and enclosed building
space open to the public; or

b.

The adult business has 10,000 or more square feet of covered and
enclosed building space open to the public, and contains restaurant
accommodations that are not restricted at any time by age and which
restaurant accommodations have a floor area equal to or greater in size
than the portion of the premises where any persons younger than 21
years of age are prohibited; or

c.

The adult business has less than 10,000 square feet of covered and
enclosed building space open to the public, and the adult business is
located more than 1000 feet from all of the following facilities
(measured in a straight line from the closest property line on which the
adult business is located to the closest edge of the property line on which
the facility is located):
1.

A “school, public” as defined by Article 30, with an average
weekday attendance (during any continuous 3 month period
during the preceding 12 months) of not less than 50 children who
are under 18 years of age.

2.

A public library.

3.

A public park which covers an area of not less than 20,000
square feet and has facilities such as a playground, baseball field,
football field, soccer field, tennis court, basketball court, or
volleyball court.

4.

A commercial or residential recreational facility, as defined in Article 30,
which serves children under 18 years of age, and has a total area for
indoor and outdoor recreation (not including parking) of not less than
20,000 square feet.

6/

ORS 461.217 permits video lottery terminals to be placed only in establishments closed to minors.
Because the Grants Pass Development Code defines an “adult business” as one which prohibits admission
to persons less than 21 years of age and “adult use” as a use conducted in an area where persons under 21
years of age are prohibited, by definition the Grants Pass ordinance applies to establishments where video
lottery is available.
7/

We express no opinion regarding whether the ordinance may be subject to challenge or preempted
by any other statutory or constitutional provision.
8/

See ORS 461.010, 461.030, 461.180, 461.200, 461.220, 461.240, 461.250, 461.260, 461.300,
461.310, 461.330, 461.500, 461.510, 461.560, 461.600 (using phrase “tickets or shares”).