Introduction

History of the Ordinance

Description of the Committee's Work

General

Findings and Conclusions

HPD Vice Review

Public Hearing Summary

Review of Written Correspondence

Committee Recommendations

A. Adult Arcade Ordinance Changes

B. Procedural Changes - SOB Enforcement

C. Land Use & Related Changes

D. Conduct and Operations

E. Amortization

Section by Section Analysis

Conclusion

This report has been prepared by the Sexually Oriented Business Revision Committee for the purpose of summarizing the Committee's work in drafting a proposed amendment to Articles II and III of Chapter 28 of the Code of Ordinances, Houston, Texas. In addition, a new Article VIII has been proposed to be added to Chapter 28. These summaries include prior efforts of regulating sexually oriented businesses (hereinafter "SOBs", testimony by the Vice Division of the Houston Police Department, reports and requests, citizen correspondence, industry memos, legal department research, and summaries of the principal themes heard in the public testimony taken by the Committee.

The Committee's intention is to supplement prior reports issued in 1983, 1986, and 1991. The original Ordinance was adopted in 1983. The 1986 Supplemental Report included premises that serve alcoholic beverages. The 1991 Supplemental Report addressed the addition of adult bookstores and movie theaters as regulated enterprises within the Ordinance's land use controls. The primary purpose of the current committee was twofold. First, the Committee desired to review the existing Ordinance and the City's ability to enforce the existing Ordinance. Secondly, there existed a need to assess and analyze the Ordinance with regard to its strengths and weaknesses and review them with regard to how effectively this Ordinance protects the interests of the public as well as the rights of the businesses subject to regulation. These amendments and additions relate primarily to the licensing of SOB employees, lighting configurations, distancing requirements between land uses, prohibition of "glory holes," elimination of closed-off areas, public notification of sexually oriented business applications, clear lines of vision, and dancer 'no-touch" policies.

SOBs enjoy Constitutional protection and must be allowed to exist and operate regardless of feelings about them. If the regulations were to be so onerous or so burdensome that they preclude or inhibit them being able to even exist, they would likely be declared unconstitutional The Committee made it clear, both during the hearings and afterwards, that it was not the intention of the Committee to propose any ordinance that would be subject to a successful court challenge because it either directly or indirectly (or for that matter inadvertently) eliminated the opportunities for such businesses to exist in the City of Houston. Therefore, the challenge is to keep SOBs from infringing on the rights of citizens without denying SOBs a reasonable opportunity to operate in the City.

This report is not intended as a legal treatise on the regulation of SOBs, although the Committee was guided in its deliberations at various points from advice by the Legal Department and received numerous legal comment from counsel for the regulated businesses. This report is intended to be reviewed from a lay perspective for the use of the members of the City Council and members of the public in understanding the reasons that the amendments and additions to the Ordinance have been proposed. This report is intended only as a summary. The Committee has developed extensive files in connection with its work that are available for review.

On May 24, 1996, the Mayor's Office announced the members of the newly re-created committee, now entitled the "Sexually Oriented Business Ordinance Revision Committee." Council Members Jew Don Boney, Jr. and Helen Huey served as co-chairs. In addition, Council Members Castillo, Driscoll, Roach; Robinson, Sanchez and Saenz served as members.

The existing Ordinance had its basis in the work of the 1983 City Council Committee on Sexually Oriented Businesses that resulted in the adoption of Ordinance 83-1812. The history or the Committee's work is documented in the report filed with the City Secretary in connection with Ordinance 83-1812. This ordinance adopted a land use program that was controlled through permits and various incidental regulations for SOBs. Its focus was on regulating adult modeling studios, adult entertainment parlors, adult massage parlors and other similar businesses. Ordinance 83-1812 did not extend land use controls to premises that had alcoholic beverage permits and licenses, to adult bookstores or to adult movie theaters because the state enabling law upon which the Ordinance was predicated did not then authorize land use controls on those forms of adult businesses. See former Art. 2372w Tex. Rev. Civ. Stat. Ann.

In 1985 the Texas Legislature revised the state enabling law to delete the exemption for premises that held alcoholic beverage permits and licenses. Following the revision of the state enabling law, the Committee reconvened to consider adding the so-called "topless bars" to the land use control structure of the Ordinance. The Committee reconsidered its prior work and took additional evidence relating in the adoption of Ordinance 86-323 which extended land use controls to the topless bars and placed the Ordinance into substantially its present form. The work of the Committee in the submission of Ordinance 86-323 is extensively documented in the Legislative Report filed with the City Council at the time of its adoption.

The genesis for the 1991 proposal amending the Ordinance related to circumstances virtually identical to those that arose in 1985. The Legislature in its 1989 session again amended the state enabling law. The 1989 amendments deleted the exemption from land use controls that had formerly existed in the state law for adult bookstores and adult movie theaters. However, some of the evidence received from the public in 1983 and 1986 related to adult bookstores and adult movie theaters. For this reason the Committee drew upon its 1983 and 1986 works in the preparation of the amended Ordinance draft and regarded the 1983 and 1986 evidence and experiences as pertinent to its 1991 work.

The scope of the Committee's recent work evolved as a result of increasing community concern regarding the proliferation of Sexually Oriented Business under the existing regulations. In addition, the Houston Police Department urged the City Council to consider means to control serious violations that were increasingly repetitive at numerous SOB establishments. Because of these requests and concerns the current Committee was established to review and strengthen the existing ordinance.

General. The Committee was re-established in the summer of 1996 to review ideas on strengthening the current Ordinance. The Committee has conducted its business in public meetings. These meetings were posted on the City Hall bulletin board and were typically attended by the Committee Members, City support staff and interested members of the public and/or the regulated businesses The Committee also conducted three of its meetings as public hearings at which members of the industry and the general public testified. Along with the City Hall posting, notification of these public meetings was published in the newspaper and letters were sent to civic associations, individuals who had requested participation, and current SOB permit holders. The mailing list consisted of more than 1,000 names and was maintained in the office of Council member Huey and the Mayor's Citizens Assistance Office. Proponents and opponents of the regulation of S0Bs were encouraged to speak openly of their ideas and viewpoints.

In addition to these public hearings, a significant number of people chose to voice their opinions through written correspondence to the mayor, city council, and/or legal department. The authors of these letters consisted of civic association presidents, topless club owners, City of Houston citizens, SOB dancers, state elected officials, advocates of various organizations and other concerned citizens. There are approximately two hundred and seventy-five letters on file. Most urged for the strengthening and enforcement of the current ordinance. While others stressed First Amendment rights, some urged industry cooperation, and others voiced concerns about the growing number of unlicensed SOBs.

Findings and Conclusions. Based upon these proceedings, the committee has made additional findings and conclusions to supplement previous legislative reports.

First, because of the criminal activities that are associated with SOBs, the Committee determined the necessity of licensing all SOB entertainers and managers. Requiring an entertainer or manager to be licensed would establish a foundation for documenting those who have previous convictions for prostitution, public lewdness and other similar offenses. In addition, licensing could help eliminate underage entertainers because they would be required to prove that they are eighteen or older in order to obtain the license.

Second, the Committee found that there exists a serious predicament in the enforcement of public lewdness, prostitution, indecent exposure, and other criminal activities. Vice officers testified that because they do not engage in inappropriate behavior (such as removing their clothing), convictions are difficult to achieve. The officer's non-participation is perceived by the entertainer that he is working under cover. The entertainer proceeds with caution, avoiding lewd behavior that might normally occur. In addition, when a patron is charged along with the entertainer, it is difficult to obtain a conviction because of the sensitivity of the relationship between the two accused.

Third, the Committee was shown a video by the HPD Vice of a bookstore "glory hole." These exist in small rooms or booths in which individuals are admitted and permitted to use one or more arcade devices. The enclosed booths are joined to the neighboring booth by a hole in the wall. These "glory holes" are used to promote anonymous sex and thus facilitate the spread of sexually transmitted diseases.

Fourth, the Committee found that sexually oriented businesses that did not have clear lines or vision encouraged lewd behavior or sexual contact. Many businesses are designed with areas that are out of the view of managers and are conducive to illegal behavior. Entertainers are cognizant of these areas where violations can occur unobserved by management or law enforcement personnel who are conducting open inspections. For example, high back chairs are used as barricades to shield illicit behavior. In addition, testimony revealed that private, secluded, dimly lit areas have the same effect. Testimony revealed that once the entertainer felt comfortable with the patron, ruling out that he was an undercover officer, he would be asked to move to a more private area. In some cases he would be asked to pay a fee to enter the "VIP" room by either purchasing a membership or purchasing an expensive bottle of champagne. HPD cannot always afford these admittance fees in the course of investigations and often cannot access and monitor these specific areas.

Fifth, the Committee considered the issue that multi-family tracts were being counted as one tract in the residential quota, when in actuality, many families were living independently upon one tract. Through the Planning and Development Department a new formula was established band on average homeowners' property size that would account for the piece of land. These new figures were used to achieve a residential formula of eight single family tracts for each acre of multi-family tract. In addition, those lots pitted for residential development, but currently unimproved, were added to the residential tract formula.

Sixth, inadequate lighting prevents managers and police officers from monitoring illegal activities. Often the lighting is so dim that an investigator cannot observe the activities from one table to the next. Vice officers testified that smaller businesses use lighting as a way to camouflage illegal activities. As a measurement for responsible lighting it was suggested that the requirement be similar to those minimum requirements established by the Uniform Building Code for 'exit' signs.

Seventh, the committee determined that enterprises that had locked rooms, were often used as fronts for prostitution. An entertainer would simply request the patron to remove his clothing. Those who objected were deemed to be Vice officers therefore restricting the usual services of the entertainer. The more money that a customer showed, the greater the 'services.'

Eighth, in keeping with the theme of family preservation, the committee was urged through public and expert testimony to include public parks in distancing restrictions. A "public park" is defined as a publicly owned or publicly leased tract of land, whether situated in the city or not, designated, maintained and operated for public use for recreational purposes by the city or any political subdivision of the state and containing improvements, pathways, access or facilities intended for public recreational use. The term "public park" shall not include public roads, rights-of-way, esplanades, traffic circles, easements or traffic triangles unless such tracts or areas contain and provide improvements or access to a recreational use by the public. Additionally, members of the Committee felt that the testimony supported inclusion of "private parks" as a protected land use. The Legal Department was asked to consider possible inclusion of this category in the final draft Ordinance.

Ninth, repeated testimony requested that notification of a pending Sexually Oriented Business Permit be given to surrounding neighbors of proposed sites. It is within the framework of the current case law to require a SOB applicant to post signs on the proposed site in addition to publishing an intent to apply for a permit in the local newspaper. Testimony revealed a great deal of concern over the general public's lack of warning of the SOB application until it has been approved and opened.

Tenth, the committee found that continuing the amortization provisions of the previous Ordinances would be preferable to grandfathering the sexually oriented businesses that do not comply with the amended Ordinance. Grandfathering would allow nonconforming uses to continue under the new ordinance in perpetuity, or until market forces wiped out the business. Grandfathering creates a monopolistic position for non-conforming property uses and prevents the municipality from exercising its power to protect its residents. Under the amortization provisions of the previous Ordinance, a business regulated as to location had six months to come into compliance. However, if such a business believed that six months was an inadequate period in which to recoup a reasonable return on invested capital, the business would have the opportunity to request an extension of the compliance period. In light of this recourse, and taking into account the present, ongoing and serious detriment of such businesses pose for the community at large, the Committee determined that an appropriate balancing of interests justified continuation of the amortization provisions.

The Houston Police Department's Vice Division played a major role in providing the City with statistics, details and testimony regarding their experiences with SOBs. In addition to written reports, three undercover vice officers testified at the August 29th hearing. Currently, the licensed SOBs are broken down as follows:

36 Topless Clubs

9 Adult Theaters

9 Nude Clubs

4 Video Stores

28 Modeling Studios

28 Adult Bookstores

In addition to the above list, there are approximately 18 adult theaters, bookstores and video stores with injunctive relief under federal court order in pending litigation styled, 4330 Richmond Avenue Incorporated, et al. v. The City of Houston. The City cannot enforce the SOB ordinance against the enterprises while the litigation is pending.

Between July 1, 1995 and August 31, 1996, the Houston Police Vice Division recorded 517 arrests in SOBs resulting in 355 convictions, or a conviction rate of 69%. Topless clubs experienced 289 dancer arrests with a conviction rate of 59%. In addition two managers were arrested but not convicted. There were six patrons of adult theaters taken into custody, resulting in a conviction rate of 83%. Dancers in all nude clubs accounted for 31 arrests, of which 71% were convicted. Thirty-six patrons of adult video stores were arrested resulting in an 86% conviction. The modeling studios' record consisted of four arrests and one conviction. One hundred and forty-nine patrons of adult bookstores were arrested with 125 convictions (84%).

Of the 36 topless clubs, the number of arrests per club ranged from 0 to 50. While seventeen clubs had less than 10 arrests in the last two years, one club had 50. Prostitution, public lewdness, narcotics, and indecent exposure made up these violations. Auto thefts are also on the rise in topless bar vicinities. This is due largely to the fact that a thief knows that he has about an hour and a half to steal the car before the owner comes back.

Topless clubs make up the majority of arrests in the Vice Division's enforcement experience. When the officer goes under cover in a club, he must assume the identity of a patron. Employees explicitly ask for badges, weapons, handcuffs, and go as far as feeling around the patron looking for these items. Once they feel comfortable that the patron is not a police officer, they will often ask him to move to a more secluded area, or possibly the VIP room of the club. The entertainer explains that she can do better dances in these areas and a "lot more things" because they aren't watched as closely. This is when the opportunity for sexual or lewd activities occurs.

The Vice Division representatives testified that licensing and criminal background checks will assist in the regulation of the entertainers behavior. Often, the same dances is arrested under a different or "stage" name. A license will ensure an individual true name, thus avoiding the use of stage names. This will ensure that individuals who are arrested and convicted are properly identified in the event of future criminal arrests.

Modeling studios, tanning salons, encounter parlors and similar SOBs require the patron to disrobe on entry. Performance is based specifically on the amount of money a patron is willing to spend. This take place behind locked doors. Vice officers' testimony revealed that in their opinion, these businesses were merely fronts for prostitution. Vice officers elaborated on schemes of credit card fraud contributed to these enterprises. Often the charged amounts are altered or bogus charges are sent through for payment. When the client complains, he is threatened with the disclosure of the type of enterprise that he was in.

Vice officers testified that "bookstores are nothing more than just blatant open sexual contact between people with complete anonymity." With professionally cut "glory holes," random sexual activity between males is rampant. One officer went as far as testifying that in his eleven years with Vice he does not recall ever seeing anyone go into a booth, watch the movie for thirty minutes and walk out.

The HPD Vice officers felt that the following ordinance change suggestions would be helpful in the enforcement and regulation of sexually oriented businesses:

1. licensing of persons involved in a SOB – manager, owners, dancers, waiters, bartenders
2. minimum age 21 (this requires a state law change)
3. premises need to be well lit inside
4. no touching
5. models in modeling studios should not be allowed to remove all their clothes
6. make it a violation for models to ask patrons to remove all clothes
7. require bookstores and arcades to be well lit, no dark corners, no booths, no access between video booths, and no "glory holes"
8. entertainers to be considered employees rather than contractors
9. all investors and shareholders to be disclosed and licensed
10. public display of licenses
11. 6 foot distances between performer and patron
12. no private viewing areas
13. devices used as barriers limited to four foot heights
14. illumination of one candle foot at floor level minimum
15. no locked interior doors in modeling or tanning studios
16. regulate escort services
17. prohibition against use of inanimate objects by SOB employees to depict sexual conduct
18. prohibition against warning systems
19. redefine "multi-unit center"
20. restrict transfer or permit/license
21. develop time line for revocation/suspension hearing
22. amend terms "knowingly" and "negligence"
23. owners, managers and employees of a SOB shall have their license immediately available

Although not all of these items were determined by the Legal Department as legally defensible under the extent enabling statute and case law, they were taken into consideration.

The initial Public Hearing was held on July 15, 1996 in the City Council Chamber. Council Member Boney outlined the intentions of the current committee as:

1. review the ordinance

1. enforcement issues
2. effectiveness of the ordinance
3. operating procedures

1. review all SOBs, regulated and licensed, unlicensed and illegal
2. licensing of employees
3. visibility issues
4. revision of land policies
5. balance SOBs' constitutional right and the right of the communities

According to members of the industry, policies for public lewdness cases are made in a personal and participative way. In other words, Vice officers encourage lewd behavior, even to the extent of participating in order to "get a case." Industry representatives generally agreed that employees licensing is necessary, though some prefer the Police Department, others prefer the Health Department. Depending on the quality of an arrest, three or five within twelve months should be sufficient for revocation/suspension of SOB license. In addition, it is felt that there lacks effective police enforcement of unlicensed tanning salons and massage parlors.

Dr. Devinney, professor of Abnormal psychology, testified that sexual deviants are attracted to communities because of Sexually Oriented Businesses. There are some deviants who cannot get sexual satisfaction unless they pay for it. While others are not satisfied unless they take or steal it. In addition, there are some sexual deviants who cannot have sexual satisfaction without forbidden partners such as children, invalids or elderly. SOBs located in residential or even retail areas attract sexual deviants because they have their entertainment, then they come out and have a fertile field for solicitation. Therefore, they do not belong in or near residential communities.

Because of the adverse secondary effects caused by Sexually Oriented Businesses, citizen responses urged the increase of distancing of SOBs from schools, churches and licensed day cares. In addition, they perceived a need to decrease the current residential formula of 75% to 25%. They also requested notification to area residents of proposed SOBs, either by posting a large sign on the property or individual mail outs. In addition, they urged that billboard advertising be illegal.

The second public hearing occurred on July 29, 1996. Attorneys representing the SOB industry requested that a hearing panel be developed to deal with permitting issues. In addition, the panel should consist of non-law enforcement individuals, and contain several different hearing officers.

Testimony indicated that although many SOBs follow the rules, most industry representatives are not against stronger regulations in regards to licensing the entertainers. Often the dancers are transient. The establishment of a license issued through HPD would create a data base of information.

Furthermore, a great deal of discussion was given to a "no touch" policy. Owners and dancers alike stated that touching was part of the entertainment. Plexiglas barriers, mini-stages, and six foot distancing were all criticized.

A third public hearing was scheduled for the public to comment on the draft ordinance prior to final approval, and was held January 6, 1997.

More than two hundred seventy-five letters were received regarding the sexually oriented business ordinance. These letters came from property owners, SOB employees, concerned citizens, parents, educators, civic associations, and business owners. While not all suggestions could be incorporated into this summary, each letter was carefully reviewed and passed to other members of the committee. These documents are on file in the Legal Department.

Approximately one hundred seventy-five letters were the result of a letter writing campaign promoted by "Adults for Legal Freedom." The principal theme of these letters was the over-regulation of the adult business industry. They feel that this industry attracts tourism, pays considerable tax revenues, and creates jobs, and therefore is a valuable asset to the city. In addition, they believe the reworking of this ordinance is for political reasons only.

Letters came in urging the extension of distancing between a SOB and neighborhoods, schools, licensed daycares, churches, medical clinics, government offices, historic districts, public parks, hospitals, and distancing between sexually oriented businesses. It was asked that new residential projects with preliminary approval from the planning commission be included in the residential formula. Also, concerns arose over the representation of multifamily dwellings in the residential radius computations.

Notification of the public that a Sexually Oriented Business has applied for an application was a relatively new issue brought before the committee members. Suggestions ranged from 90 day notices by property signs to postcards being mailed to all residents in the area. Notification by newspaper, certified mail, and public hearings were also brought forth.

With regard to entertainers, recommendations were to prohibit touching, prohibit asking customers to undress, install an 8' high stage, require 6 feet distances from patrons, and Plexiglas barriers, license all dancers, increase minimum dancing age, require criminal background checks, no licenses issued to convicted felons, and require license to be worn at all times when inside an enterprise.

Other correspondence recommended that SOB permits should be renewed annually, repeated violations should be ground for denial, prohibit locked interior doors, require sufficient illumination of the facility, and to hold owner/manager accountable for activity occurring on the premises.

While opinions and suggestions varied, most people agreed with the proposition that sexually oriented businesses would continue to exist, and expressed concern to create a solution in which they could coexist without infringing on the rights of the citizens of the city.

1. Adult Arcade Ordinance Changes

1. It is recommended that the Police Department's concerns regarding "adult arcades" or "peep shows" be addressed by amending Art. II of Ch. 28 of the Code of Ordinances to eliminate problems of sexually transmitted disease and criminal sexual conduct in such operations. At present, Art. II prohibits enclosed booths for viewing sexually oriented entertainment but regulates only establishments whose "arcade devices" are intended for the viewing of five or fewer persons. The recommended amendment would make devices intended for viewing by less than one hundred persons come under the purview of Art. II. In addition, no adult arcade or adult mini-theatre shall be configured in such a manner as to have any opening in any partition, screen, wall or other barrier that separates viewing areas for arcade devices or adult mini-theatre devices from other viewing areas for arcade devices or adult mini-theatre devices. This provision shall not apply to conduits for plumbing, heating, air conditioning, ventilation or electrical service, provided that such conduits shall be so screened or otherwise configured as to prevent their use as openings that would permit any portion of a human body to penetrate the wall or barrier separating viewing areas. This should eliminate the problem of enclosed booths and "glory holes" in such establishments. In addition, it shall be the duty of the owners and operator and it shall also be the duty of any agents and employees present in an adult arcade or adult mini-theatre to ensure that the premises is monitored to assure that no openings are allowed to exist in violation and to ensure that no patron is allowed access to any portion of the premises where any opening exists in violation.

2. It is recommended that responsibilities for hearing appeals from permit decisions of the Director be considered by a hearing officer, rather than the city's General Appeals Board, which is the present appellant body under Art. II of Ch. 28 of the Code of Ordinances. This recommendation would only impact Article II of Chapter 28, as all other appeals regarding sexually oriented businesses are presently heard by a hearing official. The hearing officer shall be an official appointed by the mayor and confirmed by city council. If, after the hearing officer determined, based upon the nature of the violation, that the ends of justice would be served by a suspension in lieu of a revocation, he may suspend the operation of the permit for a period of time to be stated in the order of suspension, not to exceed two (2) months. The General Appeals Board has never heard such an appeal is principally concerned with Building Code matters, rather than regulation of sexually oriented businesses.

3. In addition, it is recommended that the fees associated with the processing of applications should be brought up to date to reflect current actual costs.

 

2. Procedural Changes – Sexually Oriented Business Enforcement

1. It is recommended that the appellate procedures in Art. III of Ch. 28 of the Code of Ordinances be revised to provide for a panel of hearing officers, appointed by the Mayor and confirmed by the City Council, consisting of licensed attorneys, serving on rotation, who will consider all appeals relating to sexually oriented businesses and licenses. Decisions by such hearing officers will be final and subject to immediate judicial review. The availability of an intermediate appeal to the City Council from decisions of the hearing officer should be eliminated. Although the need for an intermediate appeal from permit decisions to the City Council at one time appeared necessary, it now appears that due process requires only one administrative hearing prior to judicial review. This change will eliminate delay and will prevent City Council from being inundated with the large number of appeals anticipated due to implementation of increased regulations.

2. It is recommended that the Chief of Police be required by ordinance to report to the Mayor and the City Council, on a monthly basis, all violations of sexually oriented business regulations and related state laws, with respect to all licensed facilities and licensed persons.

3. It is further recommended that the Legal Department, through the City Attorney, should have authority to initiate all administrative actions regarding suspension or revocation of any permit or license under the various ordinances. The city attorney shall execute a monthly report summarizing revocation actions filed, currently pending or decided during the reporting period. This authority currently rests with the Chief of Police in his capacity as Director.

4. It is recommended that sexually oriented business permits involved in administrative hearing or procedures regarding denial, suspension or revocation be prohibited from being transferred to another entity during the pendency of the administrative process.

5. It is recommended that the Chief of Police continue as Director under Ch. 28 of the Code of Ordinances for purposes of permitting, investigation and enforcement requirements, with the exception noted above that the Legal Department will be responsible for initiating administrative enforcement actions.

 

3. Land Use and Related Changes – Sexually Oriented Businesses

1. Information from the Planning Department indicates that the present distance requirements with respect to churches, schools and day care centers could be substantially increased, perhaps to as much as 1500 feet from the present 750 feet, and that the radius for counting residential tracts could be increased to 1500 feet from the present 1000 feet, all without unduly restricting availability of conforming locations for sexually oriented businesses to operate. The Committee recommends that these changes be instituted to protect such land uses from the adverse secondary effects of SOBs.

2. It is recommended that multi-family dwellings situated on a single tract be considered for additional protection under the residential test. Under the present ordinance, a sexually oriented business may not operate at a location if 75 percent or more of the tracts within a 1,000 foot radius of the business are residential in character. However, many multi-family dwellings are located on single tracts. Although it may not be possible to count each unit in a multi-family development as a separate residential "tract" for purposes of the residential restrictions of the ordinance, it is recommended that a ratio of eight single family tracts for each acre of multi-family tract be considered to provide additional consideration for protection of residential neighborhoods that include multi-family developments.

3. Signage restrictions under the present ordinance apply essentially only to single use, freestanding sexually oriented businesses and not to "multi-tenant centers." As a practical matter, this allows some sexually oriented businesses to utilize large signage and otherwise prohibited exterior decorations by the simple expedient of including two or more small non-sexually oriented businesses on the same premises. It is recommended that the signage and exterior appearance provisions of the ordinance be strengthened to eliminate this practice.

4. In keeping with the theme of family preservation, the Committee recommends the inclusion of "public park," and, if legally definable, "private parks" to the protected land uses. Public and expert witnesses testified that the inclusion of the was necessary to continue their rejuvenation. The term "residential" shall also include any unimproved tract designated for tax appraisal purposes as residential by the Harris County Appraisal District. In addition, it shall include any tract, that, based upon the records of the planning official has been subdivided or platted for residential use, but that is not yet designated for tax appraisal purposes as residential.

5. The committee recommends that each applicant, following the filing of the application and payment of the filing fee, place signs at the premises intended as the site for the SOB (at least 24 inches x 36 inches in size) that provide notification and information specifically stated "Sexually Oriented Business Permit Application Pending."

6. The committee recommends that each applicant give notice of the application by publication at his own expense in two consecutive issues of a newspaper published in Houston, Texas.

 

4. Conduct and Operations – Sexually Oriented Business Entertainers and Managers

1. The committee recommends that all entertainers and managers of SOBs hold permits issued by the vice division of the police department. The permit application shall include name, address, date of birth, photo identification, a list of criminal charges pending, convictions and time in jail. Crimes justifying a denial of a permit are limited to offenses relating to criminal sexual conduct and criminal activities known to be prevalent in SOBs.

2. The committee recommends the issuance of two photographic permits, a personal card and an on-site card. Each manager or entertainer shall conspicuously display his personal card upon his person at all times while acting as an entertainer or manager of or in an enterprise. The on-site card shall remain in the charge of the on-site manager of the enterprise to hold while the manager or entertainer is on the premises.

3. The committee recommends that it shall be unlawful for any entertainer to touch a customer or the clothing of a customer while engaging in entertainment or while exposing any specified anatomical areas or engaging in any specified sexual activities.

 

5. Amortization

Beginning in 1983, prior to the adoption of the current series of City regulations regarding sexually oriented businesses, the City Council Committee studying the issue concluded that the nature of the adverse secondary effects produced by the operation of sexually oriented businesses could only be addressed by enforcing regulations against existing businesses (i.e., "amortization"), rather than allowing businesses existing at the time of the ordinance passage to exist essentially in perpetuity (i.e., "grandfathering"). The City Council legislative report, which was subsequently adopted by the full City Council concluded, "During the hearings, it became evident to the Committee that the problems created by sexually oriented businesses had been allowed to persist for so long that merely addressing the problem "from here on out" would not be adequate. Prospective legislation would do little or nothing to alleviate the current serious problem caused by businesses already existing. The Committee therefore concluded that existing businesses should come under the ordinance; for this reason the Committee rejected grandfathering of existing businesses and determined that amortization would be the appropriate approach." (Houston City Council on the Proposed Regulation of Sexually Oriented Businesses Report, December 1, 1983, pg. 29).

This position was reconfirmed when the City Council revisited regulation of sexually oriented businesses in 1986 and 1991. Each subsequent revision of the City's sexually oriented business ordinances included an amortization provision, designed to give all existing affected sexually oriented businesses an initial six-month period for compliance, including relocation, if necessary, and an opportunity to justify an additional extension for lawful operation before a hearing examiner appointed by the director under the ordinance. Records of the amortization hearings indicate that many affected businesses were able to obtain extensions of up to 5½ years following the initial six-month compliance period. The average extension, historically, has been about 2 to 3 years. The factors considered in granting additional extensions of time included:

1. the amount of the owner's investment in the existing enterprise through the date of passage and approval of the Ordinance;

2. the amount of such investment that has been or will be realized through the 180^th day following the effective date of the Ordinance;

3. the life expectancy of the existing enterprise;

4. the existence or nonexistence of lease obligations, as well as any contingency clauses therein permitting termination of such leases.

Amortization, as opposed to grandfathering, or existing sexually oriented businesses in Houston was specifically upheld by the federal district court in the case of SDJ, Inc. v. City of Houston, 636 F.Supp. 1359 (S.D. Tex. 1986), affirmed 837 F.2d 1268 (5^th Cir. in SDJ, the court held that "It is generally accepted that pre-existing non-conforming uses, subject to zoning or similar regulations, are not to be perpetual, and that amortization to allow for the recoupment of investment in an existing land use is an appropriate measure to balance the property owners' rights against the proper exercise of the City's police power to regulate non-conforming uses. See, e.g., City of University Park v. Benners, 485 S.W.2d 773 (Tex. 1972).

"Grandfathering" essentially contemplates the indefinite continuance of non-conforming businesses or land uses following the passage of zoning or similar land use ordinances, notwithstanding that such businesses or uses clearly violate the provisions of the ordinance. The effect of "grandfathering" is to continue such non-conforming uses indefinitely, although new land uses may be subject to the newly enacted restrictions. A number of authorities hold that established non-conforming uses that are grandfathered must be allowed to continue the use, notwithstanding transfer or change in ownership. See Section 25-183.50, McQuillin, Municipal Corporations. These authorities hold that only if a non-conforming use is abandoned altogether can the zoning or other ordinances be enforced against the particular property or business use. Id. While these authorities may not necessarily preclude termination of non-conforming rights upon transfer of ownership under Texas law, it is altogether possible that non-conforming sexually oriented businesses could find ways to structure sale of assets or ownership interests in such a manner as to perpetuate the entity "owning" the sexually oriented business to avoid termination of non-conforming rights. In any event, most non-conforming sexually oriented businesses would likely enjoy the opportunity for a very long continuation in business under any "grandfathering" scheme.

In contrast, amortization has been determined by the prevailing majority of courts in this country to be a reasonable means of accommodating the need to protect the public from adverse land uses, while at the same time giving consideration to the rights of business owners to recoup business investments, prior to feeling the effects of a restrictive ordinance. The problem with "grandfathering' is that it perpetuates non-conforming uses for an indefinite period, thus preventing the effective exercise of the City's police powers to protect its residents. As noted by the Supreme Court of Texas, "There are strong policy arguments and a demonstrable public need for the fair and reasonable termination of non-conforming property uses which most often do not disappear but tend to thrive in monopolistic positions in the community. We are in accord with the principle that municipal zoning ordinances requiring the termination of non-conforming uses under reasonable conditions are within the scope of municipal police power. That property owners do not acquire a constitutionally protected vested right in property uses once commenced or in zoning classifications once made. Otherwise, a lawful exercise of the police power by the governing body of the City would be precluded." City of University Park v. Benners, supra, 485 S.W.2d at 778.

The adult bookstores and theaters that challenged the 1991 City of Houston sexually oriented business amendments as requiring them to change operation or relocate claimed in the pending federal lawsuit that the City was legally required to grandfather them at their present locations. The City has vigorously contested this contention, which is not in accord with the settled law governing the matter. In addition, all prior City Council committees and City Councils considering implementation of new sexually oriented business ordinance revisions have concluded that amortization is necessary to provide protection to all residents of the City, while recognizing the ability of business owners to remain in operation without relocating for a reasonable period of time. Although the City haw occasionally experimented, on a small scale, with "grandfathering" in the past, such provisions have been limited to relatively small numbers of businesses such as automotive salvage yards. In no such case has the City Council documented extensive adverse secondary effects on surrounding neighborhoods, such as have been presented to this Committee and prior City Council committees regarding the operation of sexually oriented businesses.

As a practical matter, the "grandfathering" of existing sexually oriented businesses under any proposed ordinance revision would allow such businesses to continue to operate in violation of new regulations indefinitely. However, persons proposing to operate new sexually oriented businesses would have to comply with the full force of more stringent regulations, and residents and neighborhoods presently adjacent to existing sexually oriented businesses would have to essentially live with the continuing effects of such businesses on their localities for an indefinite period. While such a situation would not necessarily give rise to any legal cause of action on the part of such new businesses or existing neighborhoods, the potential for the perception of uneven treatment with respect to the protected position of existing sexually oriented businesses is readily apparent.

Historically, the City's amortization program has significantly reduced the adverse secondary effects of sexually oriented businesses in a relatively short time-frame, while still terminating existing non-conforming businesses in a legally permissible fashion. Further, the City's position in pending litigation involving amortization of adult bookstores is best served by maintaining an amortization policy consistent with past practice, rather than experimenting with grandfathering. In conclusion, although "grandfathering" remains technically available as a legal option for implementation of proposed sexually oriented business amendments, it clearly poses significant legal and policy disadvantages, as noted above. The Committee therefore recommends that existing SOBs rendered non-conforming be allowed to recoup investment through an amortization process.

The Amended Ordinance incorporates a substantial number of procedural and administrative changes that reflect ten years of operating experience with the Original and two Amended Ordinances and a better understanding of the ways in which enforcement of the ordinance could be improved. This portion of the Report briefly outlines on a section-by-section basis the major changes that have been made and the reasons for those changes.

Section 28-81. Definitions. General Comment. As a general matter, definitions in Section 28-81 have in many cases been reworded to conform more closely with definitions already used in other municipal ordinances. In addition, "adult mini-theatre" has been added throughout this amended ordinance.

Section 28-81. Definitions. "Adult mini-theatre." In the previous Ordinance, no mention was made of an "adult mini-theatre." This definition has been added to incorporate theatres that are intended for the viewing of five (5) to one hundred (100) patrons.

Section 28-81. Definitions. "Mini-theatre device." In the previous Ordinance, no mention was made of a "mini-theatre device." This definition has been added to incorporate any coin or slug operated or electrically or electronically or mechanically controlled machine or device that dispenses or effectuates the dispensing of "entertainment," that is intended for the viewing of more than five (5) persons but less than 100 persons in exchange for any payment of any consideration. It is not intended to include any conventional motion picture screen or projections that are designed to be viewed in a room containing tier or rows of seats with a viewer seating capacity of 100 or more persons.

Section 28-81. Definitions. "Owner or owners." This definition has been expanded to include the major stockholders/controllers of a corporation. Although requests came in to list all stockholders, it does not require the disclosure of non-controlling parties.

Section 28-81. Definitions. "Specified anatomical areas." In the previous Ordinance, no mention was made of "specified anatomical areas" in this particular section. As a matter of consistency throughout the ordinance, it has been added here.

Section 28-92 (e). Application. The adult arcade or adult mini-theatre permit fee was established eleven years ago and analysis reveals that with the increase in administrative costs, this figure is no longer viable. Therefore, the increase from $75.00 to $275.00.

Section 28-92 (f). Application. In an effort to clarify the application process, the submission of the applicant must be submitted by hand delivery by "the intended operator."

Section 28-92 (h). Application. Where a premises is so configured and operated as to constitute both an adult arcade and an adult mini-theatre, then the operator may apply for and obtain a combined permit authorizing operation as both an adult arcade and an adult mini-theatre.

Section 28-93 (a). Issuance or denial by police chief. For purposes of consistency throughout the ordnance, the notice of issuance or denial of the permit has been expanded to twenty days with a possible extension totaling thirty days.

Section 28-93 (g). Issuance or denial by police chief. All fees must be paid with either a certified check, cashier's check or money order.

Section 28-94. Term. Permit terms have been restructured to read as follows: "Each permit shall be valid for a period of one (1) year and shall expire on the anniversary of its date of issuance, unless sooner revoked, or surrendered. Each permit shall be subject to renewal as of its expiration date by the filing of a renewal application with the police chief. Renewal applications must be filed at least twenty (20) days prior to the expiration date of the permit that is to be renewed and shall be accompanied by a fee of one hundred dollars ($100.00).

Section 28-95 (b). Transfer upon change. The original transfer fee was set over ten years ago. The Vice department recently analyzed the current costs for transfer. The transfer application fee has changed to $100.00 to reflect these costs.

Section 28-98. Conduct in adult arcades or adult mini-theatres. The terms "indecent exposure" and "lewd conduct" have been added here to be consistent throughout this Ordinance.

Section 28-99 (b). Appeals. "Secretary of the general appeals board" has been deleted and replaced by "hearing officer" because it was determined that the transfer of this duty will streamline the appeals into an efficient, professional, and impartial process. In the event it is not possible to hear and resolve the appeal within ten days after the date it was received by the police chief, then the police chief shall issue a temporary permit until the matter can be heard.

Section 28-102 (a). Wall penetrations. There was testimony that "adult arcades" and "adult mini-theatres" maintain small rooms or booths in which individuals are admitted and permitted to use one or more arcade devices. The enclosed booths are joined to the neighboring booth by a hole in the wall. These "glory holes" are used to promote anonymous sex and determined to facilitate the spread of sexually transmitted diseases. This section prohibits any opening in any partition, screen, wall or other barrier that separates viewing areas. This provision shall not apply to conduits for plumbing, heating, air conditioning, ventilation or electrical service, provided that such conduits shall be so screened or otherwise configured as to prevent their use as openings that would permit any portion of a human body to penetrate the wall or barrier separating viewing areas. The managers' station must be able to view all portions of the business to which customers are admitted.

Section 28-102 (b). Wall penetrations. "It shall be the duty of the owners and operator and it shall also be the duty of any agents and employees present in an adult arcade or adult mini-theatre to ensure that the premises is monitored to assure that no openings are allowed to exist in violation of subsection (a), above, and to ensure that no patron is allowed access to any portion of the premises where any opening exists in violation of subsection (a), above, until the opening has been repaired."

Section 28-103 (a). Lighting. Every place to which patrons are permitted access shall have an illumination of not less than one (1) foot candle as measured at four feet above floor level. The purpose for the change to "four feet above" floor level is that it is the height at which most activity takes place, whether standing or seated.

Section 28-111 (a). Grounds. In the previous Ordinance revocation hearings were conducted by the general appeals board as established pursuant to the provisions of the building code. This has been changed to a hearing officer appointed by the mayor and confirmed by city council. This change should speed up the revocation process with more efficiency.

Section 28-111 (a) (3). Grounds. Again, the terms "indecent exposure" and "lewd conduct" have been added to consistency.

Section 28-114. Order of the hearing officer. Because of the transfer of authority from the general appeals board to the hearing officer, this section has been reworked. If, after the hearing, the hearing officer finds that the permit should be revoked, he shall issue a written order revoking such permit which shall be effective on the third day after notice thereof is given to the operator. If the hearing officer determines, based upon the nature of the violation, that the ends of justice would be served by a suspension in lieu of a revocation, he may suspend the operation of the permit for a period of time to be stated in the order of suspension, not to exceed two (2) months. In addition, the decision of the hearing officer is final.

Section 28-115 (c). Posting removal of permit, discontinuation of use as adult arcade or adult mini-theatre. This subsection is new. It has been added for clarification. "The procedures for judicial review set forth under Section 28-135 of this code shall apply to adult arcades and adult mini-theatres.

Section 28-121. Definitions. "Multifamily tract." In the previous Ordinance, no mention was made of "multifamily tract." Concerns developed over the limited representation of multifamily dwellings such as apartment complexes, condos, and town homes in the overall residential formula. Therefore, the addition of "multifamily tract" shall be defined as any residential tract that contains any building or buildings or portion or portions thereof, that is designed, built, rented, leased, sold, let out or hired out to be occupied, or which is occupied, in separate units, each containing living, sleeping and food preparation facilities, as the homes or residences of three or more families, groups, or individuals living independently of each other.

Section 28-121. Definitions. "Owner or owners." This definition has been expanded to include the major stockholders/controllers of a corporation. Although requests came in to list all stockholders, it is not applicable to disclose non-controlling parties.

Section 28-121. Definitions. "Public Park." In the previous Ordinance, no mention was made of "public park." Concerns over the preservation of the family and the facilities geared toward the family brought forth the necessity to include "public parks" in protected land uses. Considered as centers of family recreation, a "public park" is defined as "a publicly owned or publicly leased tract of land, whether situated in the city or not, designated, dedicated, controlled, maintained and operated for use by the general public for active or passive recreational or leisure purposes by the city or any political subdivision of the state and containing improvements, pathways, access or facilities intended for public recreational use." The term "public park" shall not include parkways, public roads, rights-of-way, esplanades, traffic circles, easements or traffic triangles unless such tracts or areas contain and provide improvements or access to a recreational or leisure use by the public. A current list of public parks shall be compiled and revised by the Director of the Parks and Recreation Department and maintained for public inspection in the office of the City Secretary.

Section 28-121. Definitions. "Residential." With the inclusion of "multifamily tract," it is necessary to clarify the definition of "residential" to include any unimproved tract designated for tax appraisal purposes as residential by the Harris County Appraisal District if situated in the City or by the appraisal district of the county in which the tract is situated if not situated in the City. The term additionally shall include any tract, that, based upon the records of the planning official has been subdivided or platted for residential use, but that is not yet designated for tax appraisal purposes as residential." In addition, the definition has been extended to exclude college or university dorms.

Section 28-123 (a). Same-Application. In an effort to clarify the application process, the submission of the applicant must be submitted by hand delivery by "the intended operator."

Section 28-123 (b) (1) (a). Same-Application. The sexually oriented business permit application fee has been raised to $475.00. The original fee of $350.00 was put into effect eleven years ago and analysis reveals that with the increase in administrative costs, this figure is no longer viable to recover costs of investigation and permit issuance.

Section 28-123 (b) (1) (b). Same-Application. The sexually oriented business permit renewal fee has been increased to $225.00. The original fee of $100.00 was put into effect eleven years ago. That figure is no longer viable to cover administrative costs.

Section 28-123 (e). Same-Application. Section 28-123 (e) of this Amended Ordinance is totally new. This section was established to notify surrounding property owners that a SOB permit has been applied for. "Each applicant shall, following the filing of the application and payment of the filing fee, place signs (at least 24 inches x 36 inches in size) that provide notification and information specifically stated "SEXUALLY ORIENTED BUSINESS PERMIT APPLICATION PENDING" and the date on which the application was filed along with the notation: 'For further information, contact the Vice Division of the Houston Police Department.' All lettering on the signs must be at least 1 and ½ inches x 2 inches in size for each letter on the sign. It shall be the duty of each applicant as to each particular application to erect at least one such sign along each of the property's public road or highway frontages so as to be clearly visible from the public road or highway. If a property does not have a public road or highway frontage, then signs shall be placed upon the property at the point visible from the nearest right-of-way. Said signs shall be erected not less than three days after the filing of the application for the sexually oriented business permit and shall be checked daily by the applicant and re-posted to ensure that they remain posted until the application has been approved or denied."

Section 28-123 (f). Same-Application. Section 28-123 (f) of this Amended Ordinance is totally new. This section was established to notify the public of the application of a SOB permit. "Every applicant shall give notice of the application by publication at his own expense in two consecutive issues of a newspaper published in Houston, Texas with a daily circulation of not less than 100,000 copies. The notice shall be printed in 10-point boldface type and shall include: (1) the fact that a sexually oriented business permit has been applied for; (2) the street address, including suite or unit number, if any, of the place of business for which the permit is sought; (3) the names of the business and, if the business is operated under an assumed name, the trade name, and (4) if the applicant is a corporation, the names and titles of all officers. The notices shall be published within seven (7) days after the application is filed with the director." The choice of a daily circulation of not less than 100,000 copies was developed to avoid publication in newspapers with limited circulation.

Section 28-123 (g). Same-Application. Section 28-123 (g) of this amended Ordinance has been added to clarify the duties of the director. He/she shall be responsible for a monthly report submitted to the mayor and the city council, with a copy to the city attorney, summarizing all applications submitted under this section, and including the name of the proposed enterprise and the street address or the proposed location.

Section 28-125 (b) (1). Same-Issuance or denial. In the previous ordinance the applicant's enterprise could not be located within seven hundred fifty (750) feet of any school, church, or licensed day care centers. This has been expanded to one thousand five hundred (1,500) feet and "public park" has been added to protected land uses. Advance computer technology has brought about a more sophisticated program for determining site availability. The increase in distance allows for more protection to specific land uses while only slightly reducing the number of "reasonable alternatives sites" for the sexually oriented businesses.

Section 28-125 (b) (3). Same-Issuance or denial. In the previous ordinance the applicant's enterprise could not be located within a one thousand (1,000) foot radius where seventy-five (75) percent or more of the tracts were residential in character. This has been expanded to a one thousand five hundred (1,500) foot radius. In addition, the "multifamily tracts shall be counted as multiple residential tracts based upon the acreage of the multifamily tract according to the following formula: each one-eighth (1/8^th) acre of land or fraction thereof shall be equivalent to one (1) residential tract. For purposes of this calculation a residential tract or multifamily tract shall be considered to be in the circular area in its entirety if any portion of it lies within the circular area." In the past, multifamily tracts were counted as one or consistent with the actual number of property owners.

Section 28-125 (d). Same-Issuance or denial. In the previous ordinance the appeal process was handled by a single hearing official. The general consensus is to create a panel of hearing officials. "Such hearing officials shall be attorneys licensed to practice law in the state of Texas and shall serve without compensation. Hearings shall be conducted by each hearing official in rotation as appeals are filed. Should the hearing officer next in rotation be unavailable to hear an appeal within the time specified under this section, the hearing official next in order who is available shall be designated to hear such appeal." The hearing panel shall not exceed ten in number. An applicant requesting a hearing now has 20 days to file a written request for hearing. The purpose of this increase was to conform with other areas of this Ordinance. This change should streamline the process with greater efficiency and expertise of the law and law related issues.

Section 28-125 (e). Same-Issuance or denial. The previous ordinances allowed for an appeal to City Council pertaining to the denial of an application. Again, in an effort to streamline the process, this has been deleted. Decisions by the hearing official are final. In addition, the hearing must be conducted within 20 days.

Section 28-125 (f). Same-Issuance or denial. As a result of the hearing official's decision being final, this section has become obsolete, therefore it has been deleted.

Section 28-126 (a). Same-Transfer upon change. In the previous ordinance this section read "operator designated in the application." For more clarity of responsibility this has been edited to read "…holds the permit on the owner(s)' behalf as the owner(s)' agent…" This wording change clarifies the responsibility of the on-premise operator.

Section 28-126 (d). Same-Transfer upon change. Previous ordinances did not address the issue of ownership change during the pendency of any administrative proceeding. For greater control regarding enforcement issues, the committee finds the necessity of the prevention of permit transfers while any revocation or suspension is pending. Historically, ownership transfers have occurred to avoid regulation.

Section 28-127 (a). Same-Revocation or suspension. In the previous ordinances the revocation or suspension authority was held by the director. In an attempt to address the separation of power the revocation and suspension authority has been transferred to the City Attorney. Not only will this streamline into a more efficient process, it will remove the power of authority from the investigative agency.

Section 28-127 (a) (1). Same-Revocation or suspension. Since the previous ordinance, the state of Texas has changed the law regarding the minimum age allowed in a sexually oriented business. In order to be consistent with the state, this ordinance will raise the age from 17 to 18.

Section 28-127 (a) (3). Same-Revocation or suspension. For the purpose of enforcement, the "operator or any manager" has been included with the owner in the responsibility of actions occurring in the establishment. The addition of "should have known that such violations were occurring or did occur" makes the on-premise operator accountable for behavior on the premise.

Section 28-127 (b). Same-Revocation or suspension. The city attorney shall have sole authority to initiate any action for revocation of a permit.

Section 28-127 (c). Same-Revocation or suspension. The director shall provide the mayor, city council, and the city attorney with a monthly report summarizing the number and type of violations for each permitted enterprise. The city attorney shall execute a monthly report summarizing revocation actions filed, currently pending or decided during the reporting period. The city attorney may withhold any information from this report that may compromise any ongoing investigation.

Section 28-127 (d). Same-Revocation or suspension. This section has been changed to transfer the power of permit revocation from the mayor to the city attorney. The "designated" hearing official will be appointed by the mayor and confirmed by city council instead of the director. In addition, the hearing shall be held not less than twenty (20) days after notice is given.

Section 28-127 (e). Same-Revocation or suspension. In keeping with the consistency of the hearing official's decisions as final, "filing an appeal" has been changed to "…final disposition of any court action involving judicial review of…"

Section 28-130 (c) (3) (g). Signage. This section is new to this amended ordinance. Historical evidence indicates that enterprises have evaded the size limitation of the sign ordinance by renting out a portion of their building thus changing their status to a "multi-unit center." In turn, they directly advertise on the allowed over sized signs. "Any sign located on the premises of a commercial multi-unit center containing an enterprise that displays the name, or any portion of the name of the enterprise, any name under which any enterprise was formerly operated on the premises, or that contains any of the terms set forth in item (2) of subsection (c) or any other terminology that is commonly used to identify, or is associated with the presence of a sexually oriented business, shall comply with all restrictions of this section."

Section 28-131 "Persons younger than seventeen prohibited from entry; attendant required." The Amended Ordinance forbids the presence of anyone younger than eighteen in a sexually oriented business for whatever reason as consistent with state law.

Section 28-135 (c). Judicial review. This section is new to the Ordinance. The decision of the hearing official suspending or revoking a permit under section 28-127 of this Code shall be final as of the date written notice of the hearing official's decision is given to the owner or operator of the enterprise, but in order to afford the permit holder an opportunity to seek judicial review shall not be effective for purposes of enforcement of the decision by the director until the twentieth (20^th) day following such notice. If the permit holder initiates litigation for the purpose of seeking judicial review within the twenty (20) day period, then the decision shall not be effective for purposes of enforcement prior to the sixtieth (60^th) day following such notice. This subsection shall apply only to a decision sustaining the suspension or revocation of a permit for an existing enterprise, and shall not apply to a decision sustaining the denial of an initial application for a proposed enterprise.

Section 28-136 (a). Access, visibility, lighting and operations. Terms in this section shall be governed by the definitions in section 28-151 of this Code.

Section 28-136 (b). Access, visibility, lighting and operations. "It shall be unlawful for any owner, operator or manager of any enterprise to permit any employee to provide any entertainment to any customer in any separate area within an enterprise to which entry or access is blocked or obscured by any door, curtain or other barrier, regardless of whether entry to such separate area is by invitation, admission fee, club membership fee or any form of gratuity or consideration.

Section 28-136 (c). Access, visibility, lighting and operations. The owner, operator or manager of an enterprise must allow immediate access by any police officer, city fire department official or city health officer to any portion of the premises upon request regarding administrative search procedures ensuring compliance with the law.

Section 28-136 (d). Access, visibility, lighting and operations. "Each enterprise shall be equipped with lighting fixtures of sufficient intensity to illuminate every place to which customers are permitted access at an illumination of not less than one (1.0) foot candle as measured at four feet above floor level." According to the Uniform Building Code, one foot candle is the standard floor level light required for all emergency exits. A photographic expert testified that this level of illumination can be accurately measured with currently available light metering equipment. Therefore, this should be considered a reasonable standard.

Section 28-136 (e). Access, visibility, lighting and operations. One on-site manager is to be on duty on the premises at all times during which the enterprise is open for business or customers are on the premises. This will ensure supervision and accountability by SOBs for prevention of criminal activities.

Section 28-136 (f). Access, visibility, lighting and operations. It shall be the duty of any owner, operator or manager of an enterprise to ensure that all persons acting as managers or entertainers on the premises hold and display permits.

Section 28-136 (g). Access, visibility, lighting and operations. The on-site manager shall ensure that no entertainer or manager is allowed to conduct any business unless the on-site manager has in his possession or control an on-site card. On-site cards shall be made available for immediate inspection by any police officer, fire department official or health officer. Managers or entertainers working at more than one enterprise may retrieve their on-site cards upon departing the premises in order to present them to a manager at any other enterprise where such persons are employed.

Section 28-136 (h). Access, visibility, lighting and operations. In order to assist as a cross check, a list of permits for each manager and entertainer conducting business on the premises is required.

Article VIII. "SEXUALLY ORIENTED BUSINESS EMPLOYEES, CONDUCT AND OPERATIONS. Article VII of the Amended Ordinance is totally new.

Section 28-251. Definitions. General Comment. As a general matter, definitions in Section 28-251 have in many cases been worded to conform closely with definitions already used in other municipal ordinances. The following words and terms shall have the meanings ascribed to them in this section, unless the context of their usage clearly indicates another meaning:

Section 28-251. Definitions. "Conduct any business in an enterprise." Any person who does any one (1) or more of the following shall be deemed to be conducting business in an enterprise:

(1) Operates a cash register, cash drawer or other depository on the premises of the enterprise where cash funds or records of credit card or other credit transactions generated in any manner by the operation of the enterprise or the activities of the premises of the enterprise;

(2) Displays or takes orders from any customer for any merchandise, goods, entertainment or other services offered on the premises of the enterprise;

(3) Delivery or provides to any customer any merchandise, goods, entertainment or other services offered on the premises of the enterprise;

(4) Acts as a door attendant to regulate entry of customers or other persons into the premises of the enterprise; or

(5) Supervises or manages other persons in the performance of any of the foregoing activities on the premises of the enterprise.

Section 28-251. Definitions. "Customer." Any person who:

(1) Is allowed to enter an enterprise or any portion of an enterprise in return for the payment of an admission fee, membership fee or any other form of consideration or gratuity;

(2) Enters an enterprise or any portion of an enterprise and purchases, rents or otherwise partakes of any merchandise, goods, entertainment or other services offered therein; or

(3) Is a member of and on the premises of an enterprise operating as a private or membership club or an enterprise that reserves any portion of the premises of the enterprise as a private or membership club.

Section 28-251. Definitions. "Director." The chief of police and such employee(s) of the police department as he may designate to perform the duties of the director under this article.

Section 28-251. Definitions. "Employee." Any person who renders any service whatsoever to the customers of an enterprise, works in or about an enterprise or who conducts any business in an enterprise and who receives or has the expectation of receiving any compensation from the operator, or customers of the enterprise. By way of example, rather than limitation, the term includes the operator and other management personnel, clerks, dancers, models and other entertainers, food and beverage preparation and service personnel, door persons, bouncers, and cashiers. It is expressly intended that these definitions cover not only conventional employer-employee relationships but also independent contractor relationships, agency relationships, and any other scheme or system whereby the "employee" has an expectation of receiving compensation, tips or other benefits from the enterprise or its customers in exchange for services performed.

Section 28-151. Definitions. "Enterprise." An adult bookstore, adult cabaret, adult encounter parlor, adult lounge, adult modeling studios, adult movie theatre or any establishment whose primary business is the offering of a service or the selling, renting or exhibiting of devices or any other items intended to provide sexual stimulation or sexual gratification to its customers, and which is distinguished by or characterized by an emphasis on matter depicting, describing or relating to specific sexual activities or specified anatomical areas. The term "enterprise" shall include any premises for which a permit is required under either or both of Articles II and III of this chapter. However, the term "enterprise" shall not be construed to include:

(1) Any business operated by or employing licensed psychologists, licensed physical therapists, licensed athletic trainers, licensed cosmetologists, or licensed barbers performing functions authorized under the licenses held;

(2) Any business operated by or employing licensed physicians or licensed chiropractors engaged in practicing the healing arts; or

(3) Any retail establishment whose major business is the offering of wearing apparel for sale to customers.

Section 28-251. Definitions. "Entertainer." Any employee of an enterprise who performs or engages in entertainment.

Section 28-251. Definitions. "Entertainment." Any act or performance, such as a play, skit, reading, revue, fashion show, modeling performance, pantomime, role playing, encounter session, scene, song, dance, musical rendition or striptease that involves the display or exposure of specified sexual activities or specified anatomical area. The term "entertainment" shall include any employee or entertainer exposing any specified anatomical areas or engaging in any specified sexual activities whatever in the presence of customers.

Section 28-251. Definitions. "Manager." Any person who supervises, directs, or manages any employee of the enterprise or any other person who conducts any business in an enterprise with respect to any activity conducted on the premises of the enterprise, including any "on-site manager."

Section 28-251. Definitions. "On-site manager." A person charged by an owner or operator of an enterprise with the responsibility for direct supervision of the operation of the enterprise an with monitoring and observing all areas of the enterprise to which customers are admitted at all times during which the enterprise is open for business or customers are on the premises of the enterprise.

Section 28-251. Definitions. "Operator." The manager or other natural person principally in charge of an enterprise.

Section 28-251. Definitions. "Owner or owners." The proprietor if a sole proprietorship, all general partners if a partnership, or the corporation if a corporation.

Section 28-251. Definitions. "Permit." A current, valid permit shall be issued by the director pursuant to the terms of this article.

Section 28-251. Definitions. "Separate area." Any portion of the interior of an enterprise separated from any other portion of an enterprise by any wall, partition or other divider.

Section 28-251. Definitions. "Specified anatomical areas.":

1. Less than completely and opaquely covered:

1. Human genitals, pubic regions or pubic hair;
2. Buttock;
3. Female breast or breasts or any portion thereof that is situated below a point immediately above the top of the areola; or
4. Any combination of the foregoing; or

1. Human male genitals in a discernibly erect state, even if completely and opaquely covered.

Section 28-251. Definitions. "Specified sexual activities."

1. Human genitals in a discernible state of sexual stimulation or arousal;
2. Acts of human masturbation, sexual intercourse or sodomy;

(3) Fondling or other erotic touching of human genitals, pubic regions or pubic hair, buttock or female breast or breasts; or

(4) Any combination of the foregoing.

Section 28-253 (a). Permit required. All entertainers and managers must have an individual license. "It shall be unlawful for any person who does not hold a permit to act as an entertainer or a manager of or in an enterprise."

Section 28-253 (b). Permit required. The operators and owners shall ensure that all entertainers and manager have a personal license. "It shall be the duty of the operator and owners of each enterprise to ensure that no person acts as an entertainer or manager of or in the enterprise unless that person holds a permit."

Section 28-254 (a). Issuance of permits. "Any person who desires to obtain an original or a renewal permit shall make application to the director in person at the offices of the vice division of the police department between the hours of 8:00 a.m. and 4:00 p.m., Monday , Wednesday, or Friday, city observed holidays excepted. The application shall be made under an oath upon a form prescribed by the director." The application shall require the applicants name, home address, mailing addresses, proof of the date of birth, photographic identity card issued by a governmental agency, a list of any criminal charges pending, convictions, and time of service in jail or prisons, and two passport-type photograph of the applicant.

Section 28-254 (b). Issuance of permits. The nonrefundable processing fee for each application shall be $29.00. Each applicant shall be required to provide fingerprints in order to verify the applicant's identity and criminal history. A waiver shall be signed authorizing the director to request criminal history reports from the Texas Department of Public Safety and any appropriate federal agency.

Section 28-254 (c). Issuance of permits. A permit shall be issued by the director within ten days from filing date. If the application is not granted, the applicant shall be mailed a notice of the grounds as provided by Section 1-9(a) of this Code, within ten days from filing date.

Section 28-254 (d). Issuance of permits. Each permit issued by the director shall consist of two (2) photographic identification cards, a personal card and an on-site card.

Section 28-254 (e). Issuance of permits. "Any applicant whose application is denied and who requests a hearing on the denial shall be granted a hearing within ten days following the receipt of the request by the vice division of the police department. The hearing shall be conducted as provided in Section 1-9(c) of the Code. If the hearing officer rules against the applicant, then the applicant shall be given notice of the right to seek an injunction or judicial review of the decision as provided in Section 1-9 of the Code and applicable laws, including Article 6252-13d of the Texas Revised Civil Statutes."

Section 28-254 (f). Issuance of permits. Should the director fail to issue or deny a permit application within the time specified, or to provide a hearing within the specified time, the applicant, upon written request, will be issued a temporary permit which shall be valid until the third day after the applicant is given notice of the director or hearing officer's decision.

Section 28-254 (g). Issuance of permits. If any personal card or on-site card is lost or stolen, the holder thereof shall immediately notify the vice division and request a replacement, which shall be issued for a fee of ten dollars ($10.00) within three (3) days following verification of the identity of the holder.

Section 28-255 (a). Term, transfer, amendments. A permit is valid for two years from the date of its issuance.

Section 28-255 (b). Term, transfer, amendments. A permit is personal to the named license holder only.

Section 28-255 (c). Term, transfer, amendments. The vice division shall be advised of changes of addresses within ten days following the move.

Section 28-256 (a). Display. Each holder of a permit shall conspicuously display his permit at all times while acting as an entertainer or manager of an enterprise.

Section 28-256 (b). Display. Each manager or entertainer shall provide his on-site card to the manager or on-site manager in charge of the enterprise to hold while the manager or entertainer is on the premises.

Section 28-256 (c). Display. It shall be presumed that the actor did not have a permit unless the permit is on display.

Section 28-257. Revocation. In the event that the director has reasonable ground to believe that any permit holder has been convicted of or spent time in jail or prison for an offense as specified in the applicable provision of Section 1-10 of this Code within the time specified therein, then the director may revoke the permit following a notice of the grounds and a hearing as provided in Section 1-9(b) of this Code. In the event that the hearing officer determines that the permit should be revoked, then he shall issue his final decree to be effective in thirty days following the mailing of notice of the decree to the permit holder in order to allow the permit holder an opportunity before the permit must be surrendered to seek an injunction or judicial review of the decision as authorized in Section 1-9 of this Code and applicable laws, including Article 6252-13d of the Texas Revised Civil Statutes."

Section 28-258 (a). Conduct of entertainers. While engaging in entertainment or while exposing any specified anatomical areas or engaging in any specified sexual activities, an entertainer may not touch a customer or the clothing of a customer.

Section 28-258 (b). Conduct of entertainers. This section is intended to eliminate the closed areas in the enterprise. No employee shall engage in entertainment or expose any specified anatomical areas or engage in any specified sexual activities in the presence of a customer in any "separate area" of an enterprise in which the entry or access is blocked or obscured by any door, curtain or other barrier.

Section 28-259 (a). Penalties. The violation of any provision of this Article, including the doing of anything which is herein prohibited or declared to be unlawful or the failure to do anything or perform any duty which is required herein, shall be punishable as provided by Section 243. 010(b) of the Local Government Code. Each day that any violation shall continue shall constitute and be punishable as a separate offense.

Section 28-259 (b). Penalties. The revocation or suspension of any permit shall not prohibit the imposition of a criminal penalty and the imposition of a criminal penalty shall not prevent the revocation or suspension of a permit.

Section 1-10 of the Code of Ordinances, Houston, Texas is hereby amended by adding a new item (3) to Subsection (b) thereof, which reads as follows:

3. Permits for sexually oriented business enterprise entertainers and managers issued pursuant to Article VIII or Chapter 28 of this Code:

1. Any of the following offenses as described in Chapter 43 of the Texas Penal Code:

1. prostitution;
2. promotion of prostitution;
3. aggravated promotion of prostitution;
4. compelling prostitution;
5. obscenity;
6. sale, distribution or display of harmful material to a minor;
7. sexual performance by a child;
8. employment harmful to children; or
9. possession or promotion of child pornography;

1. Any of the following offenses as described in Chapter 21 of the Texas Penal Code:

1. public lewdness;
2. indecent exposure; or
3. indecency with a child;

1. Sexual assault or aggravated sexual assault as described in Chapter 22 of the Texas Penal Code;
2. Harboring a runaway child as described in Chapter 25 of the Texas Penal Code; or
3. Criminal attempt, conspiracy or solicitation to commit any of the above offenses.
4. Any violation of Article VIII of Chapter 28 of this Code.

The above-listed offenses shall be grounds for the denial, revocation or refusal for renewal of a permit under Article VII of Chapter 28 of this Code because persons who hold that permit are employed by sexually oriented businesses where there is a high degree of opportunity for unlawful sexual conduct or the solicitation thereof, lewd conduct, obscenity offenses, and conduct harmful to minors. Therefore, the enumerated offenses are directly related to the duties and responsibilities authorized by the subject permit. There is a serious need to protect members of the public and fellow employees of sexually oriented business enterprises from persons who have the foregoing criminal histories."

Section 7.

1. Section 2 of this Ordinance shall be effective on the 120^th day next following date of its passage and approval. An adult mini-theatre operator may obtain an extension of such compliance date to the thirtieth (30^th) day from the effective date of this ordinance by filing the following with the police chief by the thirtieth (30^th) day prior to such effective date:

1. A statement under oath setting forth that remodeling for which a City building permit is required will be necessary to conform the adult mini-theatre to the requirements of this Article, specifying the nature thereof and stating that such building permit has been obtained and work thereunder has commenced.
2. A copy of the building permit, and
3. A statement under oath that all interior doors, and all screens or curtains that may be used as door coverings have been removed from any portion of the adult mini-theatre to which patrons are admitted.

(b) A permit issued under Article II of Chapter 28 of the Code of Ordinances for the operation of an adult arcade does not constitute a valid permit for the operation of any premises that also constitutes an adult mini-theatre following the effective date or an extension as provided in Subsection (a), above. Any such premises shall be required to obtain a new permit authorizing operation as both an adult arcade and an adult mini-theatre before the effective date or the expiration of any extension granted, as provided in (a).

Section 8.

(a) Except as provided in Subsection (f) below, the amendments to Article III of Chapter 28 of the Code of Ordinances adopted in Section 3 of this Ordinance shall take effect on the 180^th day next following the passage and approval of this Ordinance. All permits issued under Article III of Chapter 28 of the Code of Ordinances prior to the date of passage and approval of this Ordinance shall become void on the effective date. The purpose of this section is to provide for the orderly implementation of this Ordinance insofar as the amendments to Article III of Chapter 28 of the Code of Ordinances adopted in Section 3 of this Ordinance institute new requirements for enterprises permitted prior to the date of passage and approval of such amendments. With respect to enterprises that fail to conform to such requirements, this section is intended to provide for an initial period for recoupment of investment, subject to extension as provided in Subsection (c) below, and an opportunity to apply for a permit and, if the permit is denied by the director and the hearing officer, to initiate judicial review prior to the effective date of this Ordinance.

(b) Any enterprise that on the date of passage and approval of this Ordinance holds a current and valid permit issued under Article III of Chapter 28 of this Code of Ordinances prior to the date of passage and approval of this Ordinance, may operate until the effective date. However, in order to qualify for amortization or for the land use provisions of subsection (e), any such enterprise shall apply for a new permit under Article III of Chapter 28 of the Code of Ordinances as amended by Section 3 of this Ordinance on or before the 45^th day next following the date of passage and approval of this Ordinance. Any enterprise that is authorized to operate until the effective date under this subsection must remain at the same location at which it was situated on the date of passage and approval of this Ordinance. Enterprises that hold a permit on the date of passage and approval of this Ordinance and apply for a new permit within 45 days, as provided above, shall be afforded a prorated credit as determined by the director for permit fees previously paid.

(c) The provisions of this Subsection (c) shall only be applicable to enterprises that on the date of passage and approval of this Ordinance hold a current and valid permit issued under Article III of Chapter 28 of the Code of Ordinances prior to the date of passage and approval of this ordinance, that timely apply for a permit within 45 days following the date of passage and approval of this Ordinance under Subsection (b) above, and the permit is denied. The director shall grant an extension for the continued operation of the enterprise in the event that the owner proves that he will be unable to recoup his investment in the business that was incurred through the date of passage and approval of this Ordinance by the effective date.

In order to secure an extension of time, the owner must submit to the Director a written request for such extension on or before the ninetieth day next following the date of passage and approval of this Ordinance. No application for extension received by the Director after that date shall be considered. Such written request shall set forth the following information:

This information shall be supported by relevant documentary evidence such as financial statements and tax records. Copies of such documentary evidence must be attached to the request for extension. No investment that was not incurred by the date of passage and approval of this Ordinance shall be considered.

The Director shall notify an applicant for an extension of time of the time and place of a hearing to be held on such request before the Director or a hearing official that he may designate. After such hearing, the Director or hearing official shall issue a written order on the request for extension. If the owner desires to seek judicial review of the Director's or hearing official's order, he may do so by following the procedure set forth in Section 28-135 of the Code of Ordinances. Extensions that are granted shall specify a date certain for closure, and shall not be valid for operation of any other location.

(d) Existing enterprises that remain in operation pursuant to Subsections (b) and (c) shall not be considered as having a permit for purposes of measurement of distances between enterprises as required pursuant to Section 28-125 (b) (2) of the Code of Ordinances.

(e) For the purpose of limiting the impact of the amendments in Article III of this Ordinance upon existing businesses, the provisions of Sections 28-125 (b) (2) that enterprises be situated 1,000 feet or more from each other shall not be applicable to any enterprise that holds a current and valid permit issued under Article III of Chapter 28 of the Code of Ordinances on the date of passage and approval of this Ordinance, provided that such enterprise makes application for a permit under Subsection (b) of this Section on or before the 45^th day next following passage and approval of this Ordinance, and provided, further, that the application is not denied under any other land use criterion of Article III of Chapter 28 of the Code of Ordinances, Houston, Texas.

(f) The effective date of Section 3 of this Ordinance as provided in Subsection (a), above shall only apply with respect to enterprises that hold a current and valid permit issued prior to the date of passage and approval of this Ordinance under Article III of Chapter 28 of the Code of Ordinances on the date of passage and approval of this Ordinance. Any enterprise that does not hold a current, valid permit, including any enterprise for which application is pending but not yet granted or denied on the date of passage and approval of this Ordinance shall be subject to all provisions of this Ordinance on such date of passage and approval, and this Ordinance shall be effective immediately upon its passage and approval with respect to any such enterprise. Any permit application currently pending or the denial of which is under appeal to a hearing official shall become invalid immediately upon the date of passage and approval of this Ordinance and shall be returned along with a refund of the application fee to the applicant. Any permit application received after passage and approval of this ordinance shall be considered by the Director under the criteria set forth in Article III of Chapter 28 of the Code of Ordinances as amended in this Ordinance, provided that any appeal to a hearing official may be heard by a hearing official appointed by the mayor and confirmed by the city council. Any enterprise for which an otherwise current and valid permit has been suspended shall be treated as though it had a current and valid permit in the administration of this Section.

Section 9.

Sections 4 and 5 of this Ordinance shall become effective on the 120^th day next following the date of its passage and approval by the Mayor. In order to afford any person who requires a permit under Article VII of Chapter 28 of the Code of Ordinances, Houston, Texas, an opportunity to apply for a permit and, if the permit application is denied by the director and the hearing officer, initiate judicial review prior to the effective date of the Ordinance, the Police Chief or his designees shall commence accepting and processing applications for permits on the ninetieth day prior to the effective date of this Ordinance. Permit applications shall be processed and hearings shall be conducted within the times specified in Section 28-254 of the Code of Ordinances, as adopted in Section 4 of this Ordinance, so as to ensure that applicants who promptly apply for permits and, if denied, request hearings, will have a period of at least thirty days in which to seek judicial review or injunctive relief before this Ordinance becomes effective. Permits issued prior to the effective date shall be postdated to the effective date.

It is the hope of the committee that by strengthening this Ordinance the following will be achieved:

(1) Streamlining through the legal department should expedite the process of revocation.

(2) The licensing of entertainers and managers should bring accountability to the profession.

(3) Configurations and lighting should aid the police department in their investigations.

(4) Increased distancing should bring more protection to the city's family centers, parks and neighborhoods.

(5) The elimination of the "glory hole" should reduce the risk of anonymous sex.

Not all sexually oriented businesses are run illegally. With stronger regulations the inclination toward criminal activity will deteriorate. Thus, allowing legitimate business to be protected along with Houston and its residents.