Who owns portable horse stalls bought with state-fair track-fund money, the Fair, the Racing Commission, or the horse owners?

Plain-English summary

The Oregon State Fair used money from a statutory "special track fund" to buy portable horse stalls for the fairgrounds racecourse. The Racing Commission's Executive Director and the Fair's Director of Business Services jointly asked: who owns these stalls? The fund existed for the benefit of horse and mule owners, trainers, and breeders. Did the people the fund served own the stalls, or did the State Fair?

Chief Counsel Donald Arnold concluded that the State Fair controlled the stalls, owned ultimately by the State of Oregon. ORS 462.057(1)(c)(F) requires the Fair to deposit 0.2 percent of gross wagering into a special track fund, used for improvements benefiting the barn-area horse and mule community. But the statute speaks to use of the money, not transfer of ownership. The Fair owns the racecourse (held by the State), made the purchase, and so owns the resulting improvement, whether the stalls are deemed permanent (becoming part of the realty) or non-permanent personal property of the purchaser. The horse community's role was to benefit from the improvement, not to acquire title.

Currency note

This opinion was issued in 2002. 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: What is the "special track fund"?
A: A fund created by ORS 462.057(1)(c)(F). The State Fair must deposit 0.2 percent of gross mutuel wagering into the fund. The money is to be used "primarily for improving the race track facilities benefiting the horse and mule owners, trainers or breeders in the barn area." Disbursements require Racing Commission approval.

Q: Doesn't the statute say the fund benefits horse owners and trainers? Doesn't that mean they own the improvements?
A: The phrase "race track facilities benefiting horse and mule owners, trainers or breeders in the barn area" describes the location of the improvements, not their ownership. ORS 174.010 prohibits courts (and the AG) from inserting words that aren't in the statute. The legislature said the improvements should benefit the barn community, not that the barn community would own them.

Q: What's the difference between permanent and non-permanent improvements?
A: Under Oregon real property law (Jensen v. Probert, 1944; Kerr v. Miller, 1999), permanent improvements become part of the realty and belong to the owner of the land. Non-permanent improvements (those that can be removed without damaging the land) remain the property of whoever paid for them. The portable horse stalls are likely non-permanent; either way, the Fair (or the State) is the owner.

Q: What is the Racing Commission's role in all this?
A: The Commission can veto proposed disbursements that wouldn't actually improve barn-area facilities and can set fire, health, quality, and construction standards for the resulting physical improvements. After a disbursement is approved, however, the Commission has no further control over the use of the improvement.

Q: Could the Fair sell or move the stalls?
A: As the controlling party, the Fair can manage the stalls within the constraints of its general state-property rules. The opinion did not address sale, but it implies the State Fair has authority to manage state property in the ordinary course.

Background and statutory framework

The Oregon Racing Commission (ORC) regulates animal racing in Oregon. The Commission may grant the State Fair up to 65 days per fiscal year to conduct racing at the state fairgrounds (ORS 462.125(5)). When the Fair conducts races, it makes the same statutory payments required of other horse and mule racing licensees, including the 0.2 percent track-fund deposit under ORS 462.057(1)(c)(F).

The legal definition of "improvement" used in the opinion (an addition to real property that increases value or utility) comes from Black's Law Dictionary as adopted by Oregon courts in Stull v. Hoke (1997). Oregon's permanent-versus-non-permanent improvement doctrine, from Jensen v. Probert and Kerr v. Miller, determined whether the improvement becomes part of the realty and who owns it.

Title to the fairgrounds, including the racecourse, is held by the State of Oregon, through the Oregon State Fair Commission (ORS 270.020; ORS 565.090(1)). The legislative history goes back to 1885 transfers from the State Agricultural Society and a 1951 creation of the State Fair Commission.

Citations and references

Statutes:

• ORS 462.057(1)(c)(F), special track fund and improvements
• ORS 462.125(5), Racing Commission authority over State Fair racing days
• ORS 270.020, state property titles
• ORS 565.090(1), State Fair Commission holding of fairgrounds
• ORS 174.010, ORS 174.020, statutory construction principles

Cases:

• PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993), text-context method
• Stull v. Hoke, 326 Or 72, 948 P2d 722 (1997), applying well-defined legal terms
• Jensen v. Probert, 174 Or 143, 148 P2d 248 (1944), permanent improvements become part of realty
• Kerr v. Miller, 159 Or App 613, 977 P2d 438 (1999), same doctrine applied

Source

• Landing 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/2002/03/op2002-2.pdf

Original opinion text

HARDY MYERS

PETER D. SHEPHERD

Attorney General

Deputy Attorney General

DEPARTMENT OF JUSTICE
GENERAL COUNSEL DIVISION

April 5, 2002

Steven W. Barham
Executive Director
Oregon Racing Commission
Portland State Office Building, Suite 310
800 NE Oregon Street #1
Portland, OR 97232
Clifton D. Lewis
Director of Business Services
Oregon State Fair and Exposition Center
2330 17th Street NE
Salem, OR 97303-1788
Re:

Opinion Request OP-2002-2

Dear Mr. Barham and Mr. Lewis:
You ask who controls or owns several portable horse stalls that the Oregon State Fair and
Exposition Center (Fair) purchased with a special track fund established by ORS
462.057(1)(c)(F). We conclude that the Fair controls the stalls, which are owned by the State of
Oregon.
Discussion
The Oregon Racing Commission (ORC) regulates animal racing in Oregon. ORC may
grant the Fair up to 65 days per fiscal year to conduct racing at the state fairgrounds. ORS
462.125(5). When the Fair conducts races, it must make the payments required of horse and
mule racing licensees under ORS 462.057(1). Id. Specifically, ORS 462.057(1)(c)(F) requires
the Fair to deposit from the gross mutual wagering into
a special track fund to be used primarily for improving the race track facilities
benefiting the horse and mule owners, trainers or breeders in the barn area – .2
percent. All such funds shall be retained by the licensee in a separate account
from all other funds and no disbursements or transfers shall be made therefrom
without prior approval of the commission. All physical improvements paid from
such funds shall satisfy reasonable fire, health, quality and construction standards
established or approved by the commission. Unless the commission provides

1162 Court Street NE, Salem, OR 97301-4096 Telephone: (503) 378-6003 Fax: (503) 378-6829 TTY: (503) 378-5938

Steven W. Barham and Clifton D. Lewis
April 5, 2002
Page 2

otherwise, such improvements shall be made on the racecourse where the race
meet which created the fund was held. (emphasis added.)
With funds paid under this statute, the Fair purchased portable horse stalls to improve its track
facilities. This purchase was approved by ORC. The question presented is who controls the
improvements, which requires us to interpret ORS 462.057(1)(c)(F).
In interpreting a statute, our task is to discern the intent of the legislature. ORS 174.020;
PGE v. Bureau of Labor and Industries, 317 Or 606, 610, 859 P2d 1143 (1993). We first
examine the statute's text and context, including other provisions of the same statute, related
statutes, and prior versions of the statute. In so doing, we consider statutory and judicially
developed rules of construction that bear directly on how to read the text, including the rule that
"words of common usage typically should be given their plain, natural, and ordinary meaning."
Id. at 611. If the legislative intent is clear from the text and context of the statute, we look no
further.
Under ORS 462.057(1)(c), the Fair must allocate .2 percent of gross mutuel wagering to a
"special track fund." The Fair may, with the approval of ORC, disburse or transfer money from
that fund. The fund must be used for "improvements" to those track facilities that benefit the
horse and mule owners, trainers or breeders in the barn area. This statute thus describes in detail
how the special track fund is to be used to create improvements. We examine the meaning of the
word "improvement" to determine how an improvement, once made, is controlled.
When a term has a well-defined legal meaning, we are ordinarily to apply that meaning in
interpreting a statute. Stull v. Hoke, 326 Or 72, 78, 948 P2d 722 (1997). The legal definition of
"improvement" is an "addition to real property, whether permanent or not; [especially] one that
increases its value or utility or that enhances its appearance." BLACK'S LAW DICTIONARY 761
(7th Ed. 1999). In Oregon, a permanent improvement becomes part of the realty and is therefore
property of the real property owner (although an improver may seek restitution for the value of
an improvement under some cirumstances). Jensen v. Probert, 174 Or 143, 149-159, 148 P2d
248 (1944); Kerr v. Miller, 159 Or App 613, 623-625, 977 P2d 438 (1999). Improvements that
are easily removed without damage to the realty remain the property of the improver. Jensen,
174 Or at 159-161; 42 CJS, Improvements §§ 3, 4. Thus, the owner of a racecourse improved
with a disbursement from the special track fund becomes the owner of any permanent
improvements. A nonpermanent improvement is owned by the party that made the requisite
expenditure for the purchase of the improvement.
Here, the State Fair owns the racecourse and purchased the portable stalls. The State of
Oregon holds title to the fairgrounds, including the racecourse, by and through the Oregon State
Fair Commission. See ORS 270.020, ORS 565.090(1).1 The Fair purchased the stalls with funds

1

Much of the property comprising the fairgrounds initially was purchased by the State Agricultural Society. In
1885, the legislature transferred the Society's property to the State Board of Agriculture, and assigned the Board
additional authority to hold in fee simple "such additional real estate as it may purchase or receive by donation." Or

Steven W. Barham and Clifton D. Lewis
April 5, 2002
Page 3

it contributed to the special track fund. Thus, the Fair controls the stalls, whether they are a
permanent part of the realty or not.
The horse and mule owners, trainers, and breeders, who are mentioned in ORS 462.057,
do not control improvements purchased under this statute. The phrase "race track facilities
benefiting horse and mule owners, trainers or breeders in the barn area" describes the location at
which improvements using money from the special track fund are to be made. ORS
462.057(1)(c)(F). Presumably, ORC has veto authority over any proposed disbursements from
the special track fund that would not provide improvements at facilities benefiting the owners,
trainers and breeders. See Letter of Advice dated May 12, 1972, to Representative Marvin J.
Hollingsworth (OP-6912). Once a disbursement has been made from the fund, however, ORS
462.057 only provides ORC with authority to establish fire, health, quality, and construction
standards for "physical improvements" to the race track facilities. ORS 462.057(1)(c)(F).
Similarly, the statute does not provide horse and mule owners, trainers and breeders with control
over the use of improvements. Attributing any authority to control the use of improvements to
them would violate the rule of statutory construction that directs a reviewing court "not to insert
what has been omitted, or to omit what has been inserted." ORS 174.010.
Sincerely,

Donald C. Arnold
Chief Counsel
General Counsel Division
JLM:GEN99478

Laws 1885 pp 58-59, §§ 4, 11; Lord's Oregon Laws §§ 5372, 5379 (1910). In 1951, the legislature created the Oregon State Fair Commission and transferred all property held by the State Board of Agriculture in connection with the State Fair to the new commission. Or Laws 1951 ch 202 § 2.