BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: sb 690
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: leno
VERSION: 2/27/09
Analysis by: Jennifer Gress FISCAL: yes
Hearing date: April 21, 2009
SUBJECT:
Outdoor Advertising Act (OAA): just compensation
DESCRIPTION:
This bill eases the circumstances under which a governmental
entity may, without payment of just compensation, order the
removal of signs that were not erected in conformance with laws
and ordinances in effect at the time of their erection and signs
that were in conformance but have subsequently been altered in
violation of their building permit.
ANALYSIS:
Existing law defines lawfully erected signs as advertising
displays that were erected in compliance with state laws and
local ordinances in effect at the time of their erection or that
were not erected in compliance but have subsequently been
modified to become so. Signs that are not lawfully erected
include those erected in a way that did not meet the laws,
ordinances, or regulations governing advertising displays at the
time the display was erected or signs whose "use" was
subsequently altered in a way that causes the display not to
meet those laws.
Under existing law, advertising displays that were not lawfully
erected are deemed to be lawful if a governmental entity did not
provide written notice to the sign owner that the display was
unlawful within five years of the display being erected. This
provision of law is known as a "rebuttable presumption." Under
existing law, an entity ordering the removal of a sign that was,
at one time, unlawfully erected but under the rebuttable
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presumption is considered lawful, is required to pay the sign
owner just compensation for the removal of the display.
As a general principle, entities that require the removal of any
advertising display that was lawfully erected, including those
deemed lawful under the rebuttable presumption, are required to
pay the sign owner just compensation to do so. This is true
even if a display is nonconforming. Nonconforming signs, as
opposed to unlawful signs, are those that were erected in
conformance with the laws or regulations in effect at the time
the display was erected but that do not meet the laws or
regulations currently in place because of a change in law,
ordinance, or regulation.
State law does not apply to advertising displays that are deemed
to be "on premise." On premise displays include those that
"advertise the sale, lease, or exchange of real property upon
which the advertising display is placed" and those that
"advertise the business conducted or services rendered or the
goods produced or sold upon the property upon which the
advertising display is placed." The regulation of on-premise
displays is a local matter, which is not a subject of this bill
or of state law generally.
This bill eases the circumstances under which a governmental
entity may, without payment of just compensation, order the
removal of signs that were not erected in conformance with laws
and ordinances in effect at the time of their erection and signs
that were in conformance but have subsequently been altered in
violation of their building permit. Specifically, this bill
does the following:
Deletes the rebuttable presumption that allows a display that
was not lawfully erected to be deemed lawful if the display
has been in existence for at least five years and the sign
owner has not received written notice from a governmental
entity that the sign was not lawfully erected, thus exempting
the governmental entity from having to pay just compensation
for the removal of that sign.
Disallows a sign that was not erected in conformance with laws
or ordinances in effect at the time of its erection but was
subsequently brought into full compliance with all laws from
being deemed lawful.
Adds height, orientation, and size to the types of
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modifications that may be made to a sign that could cause the
sign to become unlawful.
Specifies that a governmental entity is not required to pay
just compensation to a sign owner if the governmental entity
requires the removal of a sign that had been altered in
violation of its building permit.
COMMENTS:
1.Purpose . Current law protects sign owners who did not erect
their signs in accordance with state and local laws in effect
at the time of their erection or who subsequently modified
their signs in violation of their building permit by requiring
payment of just compensation if a governmental entity orders
the removal of the sign.
Furthermore, because existing law allows signs out of
compliance to be brought back into compliance with their
permit, existing law encourages sign companies to ignore
existing codes to maximize profit knowing that the best a
governmental entity can do is force them to bring the sign
into compliance with the code.
The proliferation of illegal outdoor advertising where sign
owners have erected new signs or modified existing signs
without the proper permit and in violation of the laws in
effect at the time has gone unchecked for too long.
California cities have limited compliance and inspection
resources and many, including the City of Los Angeles and the
City of San Francisco, utilize the citizen complaint process
for code enforcement. The City of San Francisco has only
three inspectors searching the city for sign compliance and
the City of Los Angeles has six sign inspectors for a city
that contains 468 square miles and 10,000 outdoor advertising
displays.
Outdoor advertising companies have asserted the rebuttable
presumption in an attempt to thwart governmental entities from
bringing advertising displays into compliance with local laws.
Deleting the rebuttable presumption provision from the
definition of "lawfully erected" would give local governments
the ability to pursue real sanctions against the worst
violators and discourage further violations in the future.
These loopholes prevent proper enforcement of local building
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and safety codes. There is a need to ensure that laws
protecting the visual landscape can be enforced in a manner
that will dissuade sign companies from failing to comply with
permitting requirements that exist to protect the public from
unsafe and unfair construction. This bill is necessary to
close those loopholes and to better protect the visual
integrity of our communities.
2.Just compensation . Just compensation requires payment of the
fair market value of a sign, an amount which can be quite
high. The fair market value of a sign located along a freeway
in an urban area is at least $1 million. While cities have
authority to order the removal of what is deemed to be a
lawfully erected sign, the compensation that would be due is
often too high for cities to opt to order the sign's removal.
Deleting the rebuttable presumption with respect to
advertising displays, narrowing the definition of "lawfully
erected" to exclude signs that were not erected in compliance
with laws in effect at the time but subsequently brought into
compliance, and otherwise easing those circumstances when just
compensation is due makes it easier for governmental entities
to order the removal of signs. Furthermore, the extent to
which governmental entities have the ability to order removal
without payment of compensation may serve as a disincentive
for sign owners to build signs that are not in compliance with
the laws in effect at the time of their erection or to modify
them in violation of their building permit.
3.Removing the rebuttable presumption: previously lawful signs
become unlawful . Removing the rebuttable presumption will
make signs unlawful that have already been deemed lawful by
virtue of the rebuttable presumption. In its letter of
opposition, the California State Outdoor Advertising
Association states that the bill "puts an unfair burden on
sign companies to find documentation that could date back to
the early 1900's."
A 1978 amendment to the federal Highway Beautification Act
established the requirement to pay just compensation with
regard to federal-aid highways, which also required
California's Outdoor Advertising Act, which implements the
federal act, to incorporate this provision. The Legislature
chose to make the compensation requirements effective for
every lawfully-erected display in the state. In reaction,
some communities asserted that any sign owner that could not
produce an original building or sign permit had an unlawful
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sign. The industry then sponsored legislation that
established, effective January 1, 1984, the rebuttable
presumption out of concern that there were many old signs for
which documentation might not be available and that thus would
be deemed unlawful and ordered removed without payment of just
compensation. The rebuttable presumption allowed these signs
to remain without threat of removal without compensation.
Record keeping today, however, is much improved than it was in
the early and mid parts of the last century.
To balance the particular circumstances of older signs with
the need to enforce existing codes and ordinances, the author
or committee may wish to consider the following options to
amend the bill:
Eliminate the rebuttable presumption only for those
signs erected in 2010 or later.
Allow the rebuttable presumption only for those
signs in existence in 1984 or earlier (year rebuttable
presumption became effective in California to protect
advertising displays built up to that point).
Rather than refer to a specific date, another avenue
is to extend the number of years defining the rebuttable
presumption from 5 to, for example, 40 or 50, such that
signs in existence for at least that period of time are
deemed lawfully erected.
4.Targeting signs that are brought into full compliance with all
laws . One provision of the bill deletes from the definition
of "lawfully erected" those signs that were initially erected
out of conformance with laws in effect at the time but that
were subsequently brought into compliance. It is unclear why
a governmental entity would want to remove a sign that is
currently in conformance with existing laws and this provision
may have unintended consequences. The sponsor notes that a
sign may not be in compliance with its building permit, which
may be different from a local ordinance, and argues that
"building permits are a critical public safety tool of local
governments that the current state law all but encourages
owners to ignore." For this reason, the author or committee
may wish to consider an amendment that would allow for signs
to be brought into full compliance, provided they had a valid
building permit.
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5.No compensation if sign was altered in violation of its
building permit . One provision of the bill specifies that a
governmental entity is not required to pay just compensation
to a sign owner if the sign has been altered in violation of
its building permit. While it should be considered unlawful
to alter a sign in violation of a permit, it seems overly
punitive to allow for the removal of such signs without
payment of compensation without first giving the sign owner an
opportunity to come into compliance with the building permit.
The sponsor explains that sign owners, upon receiving an order
to comply, will bring their sign into compliance only to
modify it illegally again within a short period of time.
Governmental entities do not have the resources to
continuously monitor all signs; sign owners are aware of this
and exploit it, according to the sponsor.
6.Previous legislation . In 2007, SB 563 (Ridley-Thomas) was
introduced to accomplish the same purpose as this bill.
Initially, that bill went further and was amended in this
committee into the current form of this bill. Following
passage by this committee, SB 563 was re-referred to the Rules
Committee, to work out additional issues, where it ultimately
died.
7.Double-referral . This bill is double-referred to this
committee and the Senate Judiciary Committee. If this bill
passes this committee, it will therefore be referred to the
Judiciary Committee.
RELATED LEGISLATION
AB 109 (Feuer) prohibits, until January 1, 2012, an advertising
display from being constructed as, converted into, or modified
as a digital advertising display and prohibits any highway
changeable message sign from displaying messages other than
official traffic operations or public safety messages. Assembly
Governmental Organization Committee.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
April 15, 2009)
SUPPORT: Los Angeles City Attorney's Office (sponsor)
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OPPOSED: California State Outdoor Advertising Association