BILL ANALYSIS Ó AB 607 Page 1 ASSEMBLY THIRD READING AB 607 (Brownley) As Amended April 13, 2011 Majority vote TRANSPORTATION 14-0 ----------------------------------------------------------------- |Ayes:|Bonnie Lowenthal, | | | | |Jeffries, Achadjian, | | | | |Blumenfield, Bonilla, | | | | |Buchanan, Eng, Furutani, | | | | |Galgiani, Logue, Miller, | | | | |Norby, Portantino, | | | | |Solorio | | | | | | | | ----------------------------------------------------------------- SUMMARY : Establishes a pilot program for the City of Santa Monica (City) to implement a pilot program allowing their transit buses to advertise on their side-mounted illuminated signs. Specifically, this bill : 1)Makes legislative findings and declarations concerning the need for establishing the pilot program. 2)Authorizes, until January 1, 2017, the City to establish a pilot program allowing their publicly-owned transit buses to be equipped with illuminated signs that display advertisements. 3)Establishes the specifications and prohibitions of the illuminated signs, as specified. 4)Requires the City to submit a specified report to the Legislature by July 1, 2016, on the incidence of adverse impacts, if any. 5)Prohibits the buses from using the streaming or paging mode for the illuminated signs when the vehicles are operated on state freeways. 6)Sunsets the provisions of this bill on January 1, 2017. EXISTING LAW : AB 607 Page 2 1)Authorizes buses, operated by a publicly-owned transit system on regularly scheduled service to be equipped with illuminated destination signs, that include destination signs, route-number signs, run-number signs, or a combination, that emit any light color, other than the color red emitting from forward-facing signs, pursuant to the following conditions: a) All illuminated signs must emit diffused non-glaring light; b) All illuminated signs shall be no greater than 720 square inches; c) All illuminated signs shall not resemble, or be installed in a position that interferes with the visibility or effectiveness of a required lamp, reflector, or other device on the vehicle; and, d) All illuminated signs shall display information directly related to public transit service, including, but not limited to, route number, destination description, and run number. 1)Permits dynamic messaging on all illuminated signs if the practice adheres to the following requirements: a) "Paging," meaning information presented for a period of time and then disappearing all at once before the same new information is presented, is permitted if the display time of each message is between 2.7 and 10 seconds. Blanking time between each message is between 0.5 and 25 seconds; and, b) "Streaming," meaning information moving continuously and smoothly across the display, is permitted if the character movement time, from one end of the display to the other, is at least 2.7 seconds, and the movement time of the entire message is not more than 10 seconds. 1)Defines "lighting equipment" as an illuminated sign installed on a bus that utilizes an electronic display to convey the route designation, route number, run number, or any combination thereof. AB 607 Page 3 FISCAL EFFECT : Unknown COMMENTS : According to the author, "Over the past two decades, investment in transportation infrastructure has fallen woefully short of meeting basic needs to serve the state's growing population and dynamic economy. Public transit agencies across the state are struggling to close transit operating budget deficits while continuing to provide vital transit service to their communities. Public transit agencies have long been allowed to use static signs placed on the sides of buses to display advertising, which, in turn, has been one innovative way for transit agencies to generate income above and beyond the farebox and tax subsidies. A recent Transit Collaboration Research Project commissioned by the American Public Transportation Association identified the emerging media of digital bus advertising as a revenue stream for transportation agencies. In 2008, the Chicago Transit Authority unveiled its first digital advertising on buses. Chicago's switch to digital media has boosted its revenue by up to 400% from what it collected for static printed poster advertisements on buses. As digital advertising has become more prevalent in cities throughout the United States, it has proven to allow for greater flexibility and increased customization while also attracting more advertisers." The City reports that the newest digital advertising displays consist of ultra-thin light emitting diode (LED) screens which are mounted to the curbside of a bus and are highly durable. They have been tested for durability in light contact with other vehicles, fixed objects, and through multiple bus wash cycles. They also have advanced sensors that dim or brighten the sign as outdoor light changes. The signs can be programmed to remain static or go dark in a defined location (e.g. on freeways). Ads are transmitted to the boards wirelessly which allows for fast, paper-free postings-reducing labor and printing costs. The cost of these units varies depending on a variety of factors such as warranty, service programs, and sign type, but a general estimate is $50,000 per sign unit. There are two companies that currently make this type of sign; one of them is a local California-based firm. Digital ads allow for greater flexibility and increased customization. Rates can be broken down by day parts allowing an advertiser to buy just a morning rate or just an evening rate. A restaurant could buy time from AB 607 Page 4 6 a.m. to 10 a.m. to promote their breakfast special and additional time in the evening to promote a dinner special. In addition, increased advertising real estate offers greater public benefit by allowing more space for public service announcements or city sponsored events. For example, concerts on the pier could be added to the rotation and could change weekly to promote just that week's headliner. Further, the City's estimate of maximum revenue potential from the transit buses existing static signs is $4.1 million. They estimate that the maximum revenue potential with a fleet with 25 digital signs could be as high as $16.5 million (with no discounts). However, based on current sales models, City staff estimates that 25 digital signs would generate an additional $4 to $6 million (nearly 100% increase from revenues from the static signs). This bill would allow for a pilot project that will look at the impacts of digital advertising and assist in determining whether it is appropriate to extend the use of illuminated advertising signs to other transit systems across the state. The time period for the pilot project seems excessive but is necessary due to an expected 18 months start up time and subsequent data collection/evaluation period. Chicago Transit : In April 2008, the Chicago Transit Authority (CTA) Board authorized a 10-year contract for Titan Outdoor (Titan) to sell digital ads on CTA buses and across the rail system. Under the agreement, Titan will be responsible for the purchase, installation, maintenance and repair of more than 1,500 digital display boards on 100 buses and at all 144 rail stations. The digital displays at rail stations and on buses will be fully integrated with CTA's Control Center and the Office of Emergency Management and Communications. In the event of an emergency, the CTA will have the ability to use the digital display boards on buses and in rail stations to provide customers with time-sensitive critical information. As such, during an emergency, CTA will be able to override ads and post emergency information or real-time service updates. According to CTA, they are assessing which bus routes will feature the digital display boards. They indicated that bus AB 607 Page 5 routes that travel along expressways, highways or Lake Shore Drive will not be considered. Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093 FN: 0000237