BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 690
Senator Leno
As Introduced
Hearing Date: April 28, 2009
Business & Professions Code
BCP:jd
SUBJECT
Outdoor Advertising
DESCRIPTION
Existing law requires compensation to be paid to owners of
lawfully erected advertising displays, and creates a rebuttable
presumption that a display has been lawfully erected if it has
been in existence for at least five years and no notice was
received stating that the display was not lawfully erected.
This bill would revise that presumption to, instead, provide
that a display is lawfully erected if it was in existence prior
to January 1, 1984.
This bill would additionally:
revise the definition of "lawfully erected" by removing
the inclusion of properties later brought into compliance
and exempt signs that were illegally modified with respect
to use, height, orientation, or size; and
provide that compensation provisions shall not apply to
an advertising display that was altered in violation of its
building permit.
(This analysis reflects author's amendments to be offered in
Committee.)
BACKGROUND
The Outdoor Advertising Act generally regulates the placement of
advertising displays (billboards) within specified distances of
highways that are part of the national system of highways. That
Act requires cities to pay compensation to the owner of a
(more)
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lawfully erected display, as defined, if they compel the removal
of a billboard. The requirement of compensation results in a
significant cost (urban billboards are valued at over $1
million) to government entities that seek to remove advertising
displays that are deemed lawful under the Act.
That compensation requirement was enacted as the result of a
1978 amendment to the federal Highway Beautification Act (the
Outdoor Advertising Act implements that Act), which required
government entities to pay just compensation for the removal of
a lawfully erected sign. The Legislature implemented that
requirement, but after enactment, concerns arose that a sign
owner who could not produce an original building or sign permit
would be deemed to have an unlawful sign. Subsequent
legislation, sponsored by the outdoor advertising industry,
established a rebuttable presumption to address the issue of
older signs for which documentation was not available. That
rebuttable presumption, the main subject of this bill, states
that an advertising display is lawfully erected if it has been
in existence for a period of five years or longer without the
owner having received written notice from a government entity
that the display was not lawfully erected.
In response to increased concern about the proliferation of
unlawful advertising displays, this bill would, among other
things, revise the rebuttable presumption to apply to displays
erected prior to January 1, 1984, narrow the definition of
"lawfully erected," and provide that compensation requirements
would not apply to an advertising display that was subsequently
altered in violation of the terms of the building permit. Those
changes would have the likely effect of reducing the number of
displays deemed "lawfully erected," thereby allowing removal
without compensation.
This bill was approved by the Senate Transportation and Housing
Committee on April 21, 2009.
CHANGES TO EXISTING LAW
1. Existing law , the Outdoor Advertising Act, regulates
placement of advertising displays adjacent to and within
specified distances of highways that are part of the national
system of interstate and defense highways and federal-aid
highways. (Bus. & Prof. Code Sec. 5200 et seq.)
Existing law defines "lawfully erected" as advertising
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displays which were erected in compliance with state laws and
local ordinances at the time of their erection or which were
subsequently brought into full compliance with state laws and
local ordinances. That term does not include displays that
were modified after erection in a manner which caused them to
be illegal. (Bus. & Prof. Code Sec. 5216.1.)
Existing law creates a rebuttable presumption that an
advertising display is lawfully erected if it has been in
existence for a period of five years or longer without the
owner having received written notice during the time period
from a governmental entity stating that the display was not
lawfully erected. (Bus. & Prof. Code Sec. 5216.1.)
This bill would revise the definition of "lawfully erected" by
removing the inclusion of properties that were subsequently
brought into full compliance with state laws and local
ordinances, and additionally provide that the term does not
include displays whose height, orientation, or size were
modified after erection in a manner that causes the display to
become illegal.
This bill would replace the above presumption with a
rebuttable presumption that an advertising display is lawfully
erected if it was in existence prior to January 1, 1984.
2. Existing law provides that no lawfully erected advertising
display shall be compelled to be removed, nor shall its
customary maintenance or use be limited, without payment of
just compensation, except as specified. (Bus. Prof. Code Sec.
5412.)
Existing law applies the above requirement of compensation to
displays that were lawfully erected in compliance with state
laws and local ordinances in effect when the displays were
erected if the displays were in existence on November 6, 1978,
or lawfully erected after November 6, 1978, regardless of
whether the displays have become nonconforming or have been
provided an amortization period. (Bus. Prof. Code Sec. 5412.)
This bill would remove the above requirement for compensation
if an advertising display was subsequently altered in
violation of the terms of the building permit.
COMMENT
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1. Stated need for the bill
According to the author:
The proliferation of illegal outdoor advertising has gone
unchecked for too long. Limited compliance and inspection
resources force municipalities to accept the blight that
illegal signs bring to neighborhoods. Building and safety
codes exist to protect people from unsafe and unfair
construction. Yet existing laws do little to allow cities and
counties to force illegal advertising into compliance.
There is a need to ensure that our 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. . . .
Unfortunately, loopholes in existing law prevent proper
enforcement of local building and safety codes. This bill is
necessary to close those loopholes and to kick start the
process of protecting the visual integrity of our communities.
The Los Angeles City Attorney's Office, sponsor, states that
"[t]his measure is important to protect the visual integrity of
cities and counties. In particular, the rebuttable presumption
has been asserted by outdoor advertising companies to try and
thwart attempts by government entities to try to bring outdoor
advertising displays into compliance with local laws."
2. Rebuttable presumption modified by author's amendments in
Senate Transportation and Housing Committee
Existing law provides a rebuttable presumption that an
advertising display is lawfully erected if it has been in
existence for at least five years and the owner has not received
notice that the sign was unlawful. If an advertising display is
determined to be lawfully erected, compensation must be paid if
it is compelled to be removed, or if its maintenance or use is
limited. Since the presumption itself is rebuttable, it acts to
shift the burden of proof on to the government entity who must
then demonstrate that it is not lawfully erected. As with any
presumption, it can rebutted if evidence is produced that
demonstrates that the sign was not, in fact, lawfully erected.
(Evid. Code Sec. 606.)
While the introduced version of the bill would have removed the
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rebuttable presumption, the author accepted amendments in the
Senate Transportation and Housing Committee to, instead,
establish a rebuttable presumption that an advertising display
is lawfully erected if it was in existence prior to January 1,
1984 (the date the rebuttable presumption went into effect).
That amendment acknowledges that older signs (those erected
prior to the presumption) may not have documentation as to their
lawfulness. At the same time, the amendment would require
somewhat newer signs (post 1983) to demonstrate their lawfulness
in order to trigger the compensation requirement. It is unclear
how owners of signs erected after 1983 would demonstrate their
sign is lawfully erected (ie., in compliance with state laws and
ordinances at that time) if the records for the sign have been
lost after multiple transfers of ownership, or are not available
from the city.
The California State Outdoor Advertising Association (CSOAA)
previously objected to the removal of the presumption due to the
"unfair burden on sign companies to find documentation that
could date back to the early 1900's," and remains opposed due to
similar concerns about the difficulty of locating documentation
for older signs. CSOAA suggests, among other things, amending
the bill to have the rebuttable presumption apply to signs
erected prior to January 1, 2000, rather than January 1, 1984.
Given the reported lack of documentation for older signs, the
Committee may wish to consider whether the proposed rebuttable
presumption strikes the proper balance, or if a later date, such
as 1995, would be more appropriate. The Committee may also want
to consider restoring language from existing law stating that
the presumption does not apply if the owner has received written
notice that the display was not lawfully erected.
Suggested amendment:
On page 2, line 10, after the period, insert:
There shall be a rebuttable presumption pursuant to Section
606 of the Evidence Code that an advertising display is
lawfully erected if it was erected prior to January 1, 1995
without the owner having received written notice during that
period from a governmental entity stating that the display was
not lawfully erected.
3. Just compensation
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Existing law provides that no lawfully erected display shall be
removed, or its maintenance or use be limited, without payment
of just compensation. That compensation, the fair market value
of the property, can be around $1 million for a billboard in an
urban area. Accordingly, the fundamental policy question raised
by this bill is under what circumstances a city should be
allowed to remove a sign without payment of compensation.
a) Displays whose height, orientation, or size were modified
Specifically, the bill would revise the definition of
"lawfully erected" to exclude displays whose height,
orientation, or size is modified in a manner that causes the
display to become illegal. The California State Outdoor
Advertising Association (CSOAA), in opposition, contends that
this provision is a "clear attempt to circumvent the Fifth
Amendment rights of sign owners." Although the Fifth
Amendment of the United States Constitution provides that
private property shall not be taken for public use without
just compensation, the entire section amended by this bill
details the criteria for when compensation is, and is not,
required. For example, the existing definition of "lawfully
erected" excludes displays whose use was modified after
erection in a manner that cause them to become illegal. No
case has been presented to the Committee that demonstrates
that the existing structure of compensation for lawfully
erected signs (based on federal law) violates the Fifth
Amendment of the Constitution.
The sponsor contends that adding specific language to the
definition of a "lawfully erected" sign does not violate the
Fifth Amendment, and that the exemption only applies when the
sign owner has engaged in an illegal act. The sponsor further
asserts that they are not aware of any interpretation of the
Takings Clause of the Fifth Amendment that treats as
"property" the ability to engage in an illegal act while
retaining the protected status that a statute gives to signs
that are "lawfully erected," and that:
[a]s early as 1951 the California Supreme Court aligned
itself with "courts throughout the country" that
"generally follow a strict policy against the extension
or enlargement" of nonconforming uses. [San Diego County
v. McClurken (1951) 37 Cal.2d 683, 687, 234 P.2d 972,
975]. The test . . . is "whether the nonconforming use
was the same before and after the passage of a zoning
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ordinance . . . ." [Edmonds v. Los Angeles County (1953)
40 Cal.2d 642, 651, 255 P.2d 772, 777-78]. The Fifth
Amendment did not require the State to enact a statutory
right of compensation available in such settings, so the
fact that the bill would clarify the word "use" in a way
that might prevent an abuse of the compensation statute
by lawbreakers hardly constitutes a "taking" within the
meaning of the Fifth Amendment.
b) Displays subsequently brought into compliance with state
laws and local ordinances
Existing law specifically defines "lawfully erected" as
including signs that are not in compliance when erected but
were subsequently brought into full compliance with state laws
and local ordinances. That requirement was arguably intended
to encourage owners of those signs to bring those signs into
full compliance. This bill would delete those signs from the
definition of lawfully erected, thus requiring a lawfully
erected advertising display to be in compliance with state
laws and local ordinances in effect at the time it is erected.
While it is unclear why a governmental entity would want to
remove a sign currently in compliance with state laws and
local ordinances, the sponsor contends 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." As
the sponsor's concern appears to be with the violation of
building permits, the Committee should consider whether the
issue could be more specifically addressed by restoring the
ability for a sign owner to bring a sign into full compliance
with state laws, local ordinances, and building permits,
provided that the owner maintains that compliance.
Suggested amendment:
On page 2, line 7, before the comma, insert:
or which were subsequently brought into full compliance
with state laws, local ordinances, and building permits and
that compliance was maintained
c) Compensation not required for displays altered in
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violation of permit
The bill would additionally provide that the compensation
requirements would not apply to advertising displays that were
subsequently altered in violation of the terms of their
building permit. The CSOAA, in opposition, contends that this
provision would discourage sign companies from improving the
appearance and safety of their signs. In response, the
sponsor contends that the Los Angeles Building and Safety
Department regularly updates permits for any company that
wants to make safety upgrades, and states that no billboard
company has ever, to their knowledge, been denied an updated
permit for such an improvement.
The sponsor further contends 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,
and, that sign owners are aware of and exploit the fact that
governmental entities do not have the resources to
continuously monitor all signs. Despite that contention, the
language of the bill would allow a minor alteration in
violation of the building permit to result in a denial of
compensation.
Similar to the suggested amendment in Comment 3(b), the
Committee should consider amending the above provision to,
instead, deny compensation to owners with displays altered in
violation of the terms of their building permit provided that,
after an opportunity to bring the sign into compliance, the
sign remains out of compliance, or is brought into compliance
and modified again in violation of the building permit.
Suggested amendment:
On page 3, line 10, before the period, insert:
and, after an opportunity to bring the display into
compliance, the display remains out of compliance, or is
brought into compliance and modified again in violation of
the permit
It should also be noted that as federal law generally requires
payment of just compensation prior to removing an advertising
sign that is lawfully erected under state law, as specified.
If above limitation on compensation is not stricken, the
sponsor should continue to work with committee staff to ensure
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that the exemption from compensation for otherwise lawful
signs does not conflict with the federal Highway
Beautification Act. (See 23 U.S.C. 131(c), (g).)
4. Author's amendment
The author agreed to the following amendment in the Senate
Committee on Transportation and Housing. Due to procedural
timing requirements, that amendment is to be taken in this
committee.
On page 2, line 10 after "illegal." insert:
There shall be a rebuttable presumption pursuant to Section
606 of the Evidence Code that an advertising display is
lawfully erected if it was in existence prior to January 1,
1984.
Support : Scenic California; San Francisco Beautiful; Coalition
to Ban Billboard Blight
Opposition : California State Outdoor Advertising Association
HISTORY
Source : Los Angeles City Attorney's Office
Related Pending Legislation :
AB 109 (Feuer) would prohibit, 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.
This bill is currently in the Assembly Governmental Organization
Committee.
Prior Legislation :
SB 563 (Ridley-Thomas, 2007), was substantially similar to the
present bill. That bill died in the Senate Rules Committee.
Prior Vote : Senate Committee on Transportation and Housing
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(Ayes 6, Noes 4)
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