BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 31
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: padilla
VERSION: 4/1/13
Analysis by: Eric Thronson FISCAL: yes
Hearing date: April 9, 2013
SUBJECT:
Outdoor Advertising Act: arena exemption
DESCRIPTION:
This bill clarifies aspects of the arena exemption to the
Outdoor Advertising Act.
ANALYSIS:
The Outdoor Advertising Act (OAA) regulates the size,
illumination, orientation, and location of advertising displays
adjacent to and within specified distances of interstate or
primary highways, and, with some exceptions, specifically
prohibits any advertising display from being placed or
maintained on property adjacent to a section of landscaped
highway.
The OAA generally does not apply to "on premise" advertising
displays, which include those advertising the sale of the
property upon which it is placed or that advertise the business
conducted, services rendered, or goods produced or sold on the
property. Local government regulates on-premise displays,
except for certain safety requirements.
In 2008, the Legislature passed AB 2339 (Solorio), Chapter 493.
Known as the arena exemption, AB 2339 expanded the definition of
an "on premise" display to include those displays advertising
products, goods, or services sold on the premises of an arena
that has a capacity of at least 5,000 seats and is located on
public land, provided certain conditions were met. AB 2339
specifically prohibited the advertising of products, goods, or
services directed at an adult population, including alcohol,
tobacco, gambling, or sexually explicit material.
This bill clarifies aspects of the OAA arena exemption in the
following ways:
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Allows arenas to display advertising for products, goods, or
services sold on premises as well as part of a sponsorship
marketing plan if the arena is on public land and has a
capacity of 15,000 or more seats.
Defines the premise of the arena to potentially include a
district encompassing the arena but not extending more than
1,000 feet beyond the arena.
Requires the local government to adopt an ordinance
authorizing the advertising displays on the premise of the
arena with specific regulations including, but not limited to,
the number and size of allowable signs, illumination
restrictions, and hours of operation.
Requires the state Transportation Secretary to review and
certify, in consultation with the California Department of
Transportation (Caltrans), that the proposed displays and sign
ordinance meet the minimum statutory requirements.
Restricts the arena from advertising products, goods, or
services related to distilled spirits, tobacco, firearms, or
sexually explicit material.
Allows a qualifying arena to place up to two displays at
approaching highway off ramps and treat them as though they
are arena displays as long as the displays are authorized by a
local ordinance as of January 1, 2019.
Requires the owner of these displays either to provide or fund
the installation of one changeable message sign to accommodate
public service messages such as "Amber Alerts" and emergency
disaster communications.
COMMENTS:
1.Purpose . According to the author, this bill allows for local
control while establishing statewide guidelines for
advertising displays at professional sports facilities and
arenas. The author states that the cost of building,
operating, and maintaining professional sports facilities is
rising, and while public funding was traditionally a large
portion of the necessary financing, today funding comes from
many different sources such as naming rights, ticket sales,
and concessions. A growing revenue source funding
professional sports arenas is advertising, both inside and
outside the arena. The author argues that this bill is
important to enable current and future arenas to tap into this
increasingly critical financing source to backfill the
decrease in public funding available for such purposes.
SB 31 (PADILLA) Page 3
2.Committee policy on exemptions to the OAA . Over the years,
legislators have introduced numerous bills to exempt stretches
of road from the OAA's prohibition against having an
advertising display along a landscaped freeway. Several years
ago, the committee determined that continued approval of
exemptions for nonconforming and prohibited advertising
displays threatened to undermine and render meaningless the
provisions and intent of the OAA. Therefore, in order to
defend the integrity of the OAA, the committee has adopted a
policy since the 2007-08 legislative session that states that
the committee will not consider any measure that would result
in the placement of an advertising display in violation of the
OAA. The committee agreed with the 18th century Scottish poet
James Thomson, who opined, "But who can paint like Nature?
Can imagination boast, amid its gay creation, hues like hers?"
In the current session, however, the committee has adopted a
slightly modified policy on exemptions to the OAA. In light
of recent legislative decisions, it has become clear that
simply denying a hearing of bills related to the OAA does not
allow the committee to consider measures that reflect shifts
in statewide policy positions, such as the financing of
professional sports arenas. For this reason, the committee's
policy for the current session retains the prohibition against
hearing any measure exempting specific advertising displays
from the OAA, but includes the possibility of hearing bills
reflecting legislative changes to statewide policy. This is
one such bill.
3.Why are arenas exempted from the OAA ? Major sports arenas are
often funded primarily with public dollars, but as the public
becomes more reluctant to apply tax dollars to such projects,
private investors are increasing their share of arena
development and construction costs. To address this shift,
arena promoters have looked for other means by which to
finance these costly projects. Proponents determined that
advertising revenue, particularly generated alongside busy
interstates in front of massive sports complexes, was a
reasonable and potentially lucrative alternative to public
financing. In some ways, policymakers have traded direct
public funding for the indirect public cost of allowing these
signs to exist, including all the potential downsides such as
increased driver distraction and blight.
4.Why are these clarifications necessary ? The current arena
exemption contains some ambiguities which, left unaddressed,
SB 31 (PADILLA) Page 4
appeared headed to litigation. For example, the current
language allows arena displays to advertise products, goods,
or services sold on the premises of an arena. Some have
argued that this can include any products or services that are
described in a sponsorship marketing plan agreed to on the
arena premises. Caltrans interprets current law as only
allowing the advertisement of products or services actually
sold on premises, such as those products sold at refreshment
bars within the arena. In this example, it seems responsible
to clarify statute and avoid costly legal costs for the state,
because if the intent of the exemption is to help arena
developers fund arena construction, then existing law should
make available to these developers the most effective tools
possible.
In addition, some argue that further clarification regarding
the state's role in permitting these signs is necessary.
Because the OAA in many ways mirrors federal law, exemptions
from the OAA can jeopardize the state's receipt of federal
highway funding. While the regulation of on-premise displays
is generally a local matter, some argue that review at the
state level is necessary due to the fact that these signs can
possibly have statewide implications such as a reduction in
federal aid highway funds. This bill addresses this concern
by requiring the Secretary of the Transportation Agency to
review the locally-adopted ordinance permitting the signs.
5.Opposition . Opponents of the bill raise several issues.
First, opponents argue that this bill creates a conflict for
local governments because the billboards must be on public
land, so the local government may share in the advertising
revenue, and at the same time is required to regulate
on-premise signs. Second, opponents share the concern that
these signs could jeopardize federal highway funds. Third,
opponents are concerned that this bill is unnecessarily broad,
suggesting that dozens of new billboards would be exempted by
this bill. Finally, the opponents believe this bill puts the
Legislature and the governor in a position of picking winners
and losers, because it is unfairly exempting some sign owners
from state laws and not others.
POSITIONS: (Communicated to the committee before noon on
Wednesday, April 3,
2013.)
SUPPORT: AEG
SB 31 (PADILLA) Page 5
Farmers Insurance Group
State Building and Construction Trades Council,
AFL-CIO
OPPOSED: California State Outdoor Advertising Association