BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 607
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 607 (Brownley)
          As Amended  June 20, 2011
          Majority vote
           
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          |ASSEMBLY:  |72-1 |(May 5, 2011)   |SENATE: |33-3 |(July 14,      |
          |           |     |                |        |     |2011)          |
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           Original Committee Reference:    TRANS.  

           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.  

           The Senate amendments  :  

          1)Clarify the definition of highway as codified in the Streets 
            and Highways Code.  

          2)Restrict the number of buses to be mounted with illuminated 
            signs to 25 for the first two years of the pilot program and 
            30 buses thereafter.  
           
          EXISTING LAW  :  

          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 
            that all illuminated signs:  

             a)   Must emit diffused non-glaring light;  

             b)   Shall be no greater than 720 square inches;  

             c)   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, 









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             d)   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.  

           AS PASSED BY THE ASSEMBLY  , this bill:

          1)Made legislative findings and declarations concerning the need 
            for establishing the pilot program.  

          2)Authorized, 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)Established the specifications and prohibitions of the 
            illuminated signs, as specified.  

          4)Required the City to submit a specified report to the 
            Legislature by July 1, 2016, on the incidence of adverse 
            impacts, if any.  

          5)Prohibited the buses from using the streaming or paging mode 
            for the illuminated signs when the vehicles are operated on 
            state freeways.








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          6)Sunsets the provisions of this bill on January 1, 2017.  

           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 








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          rate or just an evening rate.  A restaurant could buy time from 
          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 








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          routes that travel along expressways, highways or Lake Shore 
          Drive will not be considered.  

           
          Analysis Prepared by  :    Ed Imai / TRANS. / (916) 319-2093 


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