808	                         February 13, 2014	                            No. 11

               IN THE SUPREME COURT OF THE
                     STATE OF OREGON

                             Patricia MILNE,
                           Cliff Sain-Thomason,
                           and Wayne Simmons,
                                 Petitioners,
                                      v.
                           Ellen ROSENBLUM,
                            Attorney General,
                             State of Oregon,
                                Respondent.
                               (SC S061785)

    En Banc
   On petition to review ballot title filed November 19, 2013;
considered and under advisement on January 7, 2014.
   Kevin L. Mannix, Kevin L. Mannix, P.C., Salem, filed the
petition and reply for petitioners on review.
   Judy C. Lucas, Senior Assistant Attorney General,
Salem, filed the answering memorandum for respondent
on review. With her on the answering memorandum were
Ellen F. Rosenblum, Attorney General, and Anna M. Joyce,
Solicitor General.
    BALDWIN, J.
  Ballot title referred to the Attorney General for
modification.
     Petitioners sought review of the Attorney General’s certified ballot title
for Initiative Petition 31 (2014), which, if enacted, would amend the Oregon
Constitution to distribute 50 percent of net lottery proceeds to counties for coun-
ties to allocate for public purposes similar to those specified by current law. Held:
The Attorney General’s certified ballot title caption and “yes” vote result state-
ment fail to correctly identify the effect of the proposed measure.
    Ballot title referred to the Attorney General for modification.
Cite as 354 Or 808 (2014)	809

	        BALDWIN, J.
	        Petitioners seek review of the Attorney General’s
certified ballot title for Initiative Petition 31 (2014). See ORS
250.085(2) (requirements for review of certified ballot titles).
We review ballot titles for substantial compliance with ORS
250.035. See ORS 250.085(5) (so stating). For the reasons
explained below, we refer the ballot title to the Attorney
General for modification. ORS 250.085(8).
	        Initiative Petition 31 (“Oregon Lottery Local Control
Act”) is a proposed constitutional amendment that would
dedicate 50 percent of state lottery net proceeds to a
“county revenue distribution fund.” Currently, the Oregon
Constitution provides for the statewide expenditure of lot-
tery proceeds for specified purposes. Or Const, Art XV, § 4.
All net proceeds are to be used for the purposes of “creat-
ing jobs, furthering economic development, financing public
education in Oregon or restoring and protecting Oregon’s
parks, beaches, watersheds and native fish and wildlife.” Or
Const, Art XV, § 4(3). Two provisions specifically require
allocations by percentage of net proceeds for certain pur-
poses. See Or Const, Art XV, § 4(4)(d) (requiring 18 percent
allocation for education); Or Const, Art XV, § 4(8) (requir-
ing 15 percent allocation for parks and natural resources).
Additionally, by statute, percentages of net funds are allo-
cated to other state programs related to lottery activities.
See ORS 461.549(2) (one percent for gambling treatment);
ORS 461.543(4) (one percent for sports lottery account);
ORS 461.547(1) (two-and-a-half percent for economic devel-
opment activities).
	        Initiative Petition 31 would amend the Oregon Con-
stitution to provide that “50% of the net proceeds from the
State Lottery shall be deposited in a county revenue dis-
tribution fund to be created by the Legislative Assembly.”
Oregon Lottery Local Control Act, § 2. The measure pro-
vides that “[t]en percent of [those] moneys must be allocated
and distributed to all counties in an equal amount for each
county” and “[n]inety percent of the moneys must be allo-
cated and distributed to all counties in the same proportion
for each county as the State Lottery generates gross pro-
ceeds from such county.” Id. § 3(a), (b). The measure further
810	                                                  Milne v. Rosenblum

provides that the funds distributed to all counties shall be
used for “any of the following public purposes: creating jobs;
furthering economic development; financing public educa-
tion; restoring and protecting parks, beaches, watersheds
and native fish and wildlife; and providing public safety.” Id.
§ 4. Thus, counties would be permitted to utilize distributed
funds for the same general purposes as those that the consti-
tution currently dictates for the state, but, unlike the state,
counties would be allowed to also expend lottery funds for
the purpose of providing for public safety. Moreover, unlike
what the constitution currently dictates for the state, coun-
ties would not be subject to the requirement that 18 per-
cent of the funds be allocated for educational purposes and
15 percent be allocated for parks and natural resources.1
Under the measure, the legislature “may not establish sub-
stantive limitations” on how counties allocate distributed
funds “or [impose] additional restrictions on the use of those
moneys.” Id. § 6.
	          The Attorney General certified the following ballot
title:

     “Amends Constitution: Fifty percent of net lottery
     proceeds distributed to counties, reducing amount
             available for state appropriations
    	“Result of ‘Yes’ Vote:  ‘Yes’ vote requires depositing
    50% of lottery net proceeds in fund for distribution to coun-
    ties; reduces amount of lottery funding available for legis-
    lative appropriations.
    	“Result of ‘No’ Vote:  ‘No’ vote retains using 100% of
    lottery net proceeds for legislative appropriations for spec-
    ified public purposes, including: economic development,
    public education, protecting natural resources.
    	“Summary:  Amends Constitution. Constitution cur-
    rently mandates 100% of state lottery net proceeds be used
    to create jobs; further economic development; finance a pub-
    lic education stability fund and a school capital matching

	1
      The measure provides, without further restrictions, that “[e]ach county
may distribute funds to other units of government such as cities, towns, or school
districts, operating within the county, provided the funds are used for purposes
listed in paragraph (4) of this section.” Oregon Lottery Local Control Act, § 5.
Cite as 354 Or 808 (2014)	811

   fund; finance a parks and natural resources fund to be
   used for specified purposes, including restoration and pro-
   tection of parks, beaches, watersheds, and native fish/wild-
   life. Measure requires 50% of lottery net proceeds be depos-
   ited in ‘county revenue distribution fund’ and distributed
   to counties: ten percent divided equally between counties,
   remainder distributed based on each county’s lottery sales.
   Reduces net lottery proceeds available for appropriation by
   legislature. Counties shall use funds for currently specified
   purposes, plus public safety. Counties may distribute funds
   to other governmental units within county for such pur-
   poses. Other provisions.”

	        Petitioners challenge the caption, the “yes” and “no”
vote result statements, and the summary. We begin with
petitioners’ challenge to the caption.

	        ORS 250.035(2)(a) provides, in pertinent part, that
the ballot title of a state measure shall consist of “[a] caption
of not more than 15 words that reasonably identifies the sub-
ject matter of the state measure.” Petitioners contend that
the caption suggests that passage of the measure could result
in a 50-percent reduction in lottery proceeds available for
currently identified public purposes. Petitioners argue that
the caption—in particular, the phrase “reducing amount
available for state appropriations”—is inaccurate and mis-
leading because the measure would still require counties to
utilize funds for purposes substantially the same as those
for which the funds may be used by the state. Although this
measure does not subject counties to the requirement that
certain percentages of net proceeds be allocated for specific
purposes and prohibits the legislature from further restrict-
ing counties in determining how proceeds would be allo-
cated, it is misleading, according to petitioners, to suggest
that counties would be totally unrestricted in the use of the
lottery proceeds.

	       The Attorney General responds that the caption is
neither inaccurate nor misleading because “the measure
distributes 50% of net lottery proceeds to the counties,
thereby reducing the amount of net lottery proceeds avail-
able for distribution by the state.” Further, the Attorney
General argues that “[t]he caption is not required to explain
812	                                                 Milne v. Rosenblum

the measure’s ‘restrictions’ on counties’ use of the funds; the
permitted uses are appropriately set out in detail in the bal-
lot title summary.”
	In Greene v. Kulongoski, 322 Or 169, 175, 903 P2d
366 (1995), we observed that a caption serves as the “head-
line” for the ballot title and “provides the context for the
readers’ consideration of the other information in the bal-
lot title.” We affirmed the principle that a caption “satisfies
the statutory requirement that it must ‘reasonably identify’
a measure’s subject if *  * it states or describes the sub-
                           * 
ject accurately and in terms that will not confuse or mis-
lead potential petition signers and voters.” Id. at 174-75;
see also Feeney v. Roberts, 309 Or 324, 327-28, 787 P2d 485
(1990) (caption modified because the term “vote,” in context,
obscured the measure’s effect and made it difficult for voters
to understand its subject); Fred Meyer, Inc. v. Roberts, 308
Or 169, 173-74, 777 P2d 406 (1989) (term “protect” in cap-
tion did not reasonably identify subject of measure and was
misleading because it suggested that voters might be simply
confirming current state of law).
	        Here, the effect of this measure is to reduce lottery
funding controlled by the state by 50 percent. That 50 per-
cent would be distributed to counties and then allocated by
counties for public purposes similar to those specified by cur-
rent law, with the exception that counties could also provide
funds for public safety. The certified caption obscures that
significant fact and suggests that all lottery funding for cur-
rent purposes would necessarily be reduced by 50 percent.
The Attorney General is correct that counties, rather than
state government, will have control of those lottery funds.
We conclude, however, that the certified caption nevertheless
obscures the effect of this measure, and further may cause
voters to believe that counties would be totally unrestricted
in the use of any lottery funds. For that reason, the caption
does not reasonably identify the subject matter of this mea-
sure as required by ORS 250.035(2)(a).2 We therefore refer
the caption to the Attorney General for modification.
	2
      We agree with petitioners that the source of the problem here is the phrase
“reducing amount available for state appropriations” in the caption. We note that
substitution of that phrase with wording such as “to be allocated for specified
purposes” would resolve the problem.
Cite as 354 Or 808 (2014)	813

	         Petitioners also challenge the “yes” and “no” vote
result statements. Under ORS 250.035(2)(b) and (c), the bal-
lot title must include simple and understandable statements,
of no more than 25 words each, that describe the result if
the measure is approved and the result if the measure is
rejected. The certified “yes” result statement states that the
measure “requires depositing 50% of lottery net proceeds in
fund for distribution to counties” and includes the phrase
“reduces amount of lottery funding available for legisla-
tive appropriations.” The latter phrase does not reasonably
describe the result if the measure is approved for the same
reasons we explained in rejecting the certified caption: It
obscures the effect of this measure, and further suggests
that the counties’ allocation of lottery funds would be totally
unrestricted if the measure passes. We therefore refer the
“yes” result statement for modification.
	        We conclude that both the “no” result statement and
the summary certified by the Attorney General substan-
tially comply with the requirements of ORS 250.035.
	       Ballot title referred to the Attorney General for
modification.
