BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 UNFINISHED BUSINESS


          Bill No:  SB 31
          Author:   Padilla (D), et al.
          Amended:  8/22/13
          Vote:     21


           SENATE TRANSPORTATION & HOUSING COMMITTEE:  8-0, 4/9/13
           AYES:  DeSaulnier, Gaines, Beall, Cannella, Galgiani, Lara, Liu,  
            Wyland
          NO VOTE RECORDED:  Hueso, Pavley, Roth
           
          SENATE APPROPRIATIONS COMMITTEE:  7-0, 4/22/13
           AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg

           SENATE FLOOR  :  37-0, 4/29/13 (Consent)  
          AYES:  Anderson, Beall, Berryhill, Block, Calderon, Cannella,  
            Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,  
            Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,  
            Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla,  
            Pavley, Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland,  
            Yee
          NO VOTE RECORDED:  Liu, Vacancy, Vacancy

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Outdoor Advertising Act:  arena exemption

           SOURCE  :     Author


           DIGEST  :    This bill allows arenas to display advertising for  
          products, goods, or services sold on premises as well as part of  
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          a sponsorship marketing plan if the arena is on public land and  
          has a capacity of 15,000 or more seats.

           Assembly Amendments  (1) provide if an advertising display  
          authorized by this bill is subject to a notice from any  
          applicable federal agency that the operation of that display  
          will result in the reduction of federal aid highway funds, the  
          display owner shall remove all advertising copy from the display  
          within 60 days after the state notifies the display owner of the  
          receipt of the federal notice, (2) provide failure to remove the  
          advertising copy will result in a civil fine, imposed by the  
          California Department of Transportation (Caltrans), of $10,000  
          per day until the advertising copy is removed, (3) provide the  
          local agency adopting the ordinance authorizing the displays  
          have the primary responsibility for ensuring that the displays  
          remain in conformance with all provisions of the ordinance and  
          of this bill, as specified, and (4) make other technical and  
          conforming changes.

           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.

          AB 2339 (Solorio, Chapter 493, Statutes of 2008), known as the  
          arena exemption, 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.


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          This bill clarifies aspects of the OAA arena exemption in the  
          following ways:

          1.Recasts the arena advertising exception to exempt from the OAA  
            specified advertising displays authorized before January 1,  
            2019, by local ordinance, at a venue with a capacity of 15,000  
            seats or more that is capable of providing a permanent venue  
            for professional sports. 

          2.Requires the local government to adopt an ordinance  
            authorizing the advertising displays on the premise of the  
            arena with specific regulations including: 

             A.   Number of signs and total signage area allowed. 
             B.   Maximum individual signage area. 
             C.   Minimum sign separation. 
             D.   Illumination restrictions and regulations, including  
               signage refresh rate, scrolling, and brightness. 
             E.   Illuminated sign hours of operation. 

          1.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. 

          2.Authorizes advertising displays to advertise any products,  
            goods, or services sold within that area on a regular basis,  
            or marketed or promoted in that area pursuant to a sponsorship  
            marketing plan, except distilled spirits, tobacco, firearms,  
            or sexually explicit material. 

          3.Defines a "sponsorship marketing plan" as an agreement between  
            the property owner, facility owner, facility operator, or  
            occupant of the premises of an arena and a sponsor pursuant to  
            which the sponsor is allowed to include its logo, slogan, or  
            advertising displays and that meets both of the following  
            conditions: 

             A.   The sponsorship marketing plan is for a period of not  
               less than one year. 

             B.   The sponsorship marketing plan grants the sponsor the  
               opportunity to display its logo, slogan, or advertising in  
               the interior of structures on the premises of an arena, or  
               conduct promotions, public relations, or marketing  

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               activities on the premises of an arena. 

          1.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. 

          2.Requires Caltrans to review and certify that the proposed  
            displays and sign ordinance meet the minimum statutory  
            requirements. 

          3.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. 

          4.Specifies that if an advertising display is subject to a  
            notice from the United States Department of Transportation,  
            the Federal Highway Administration, or any other applicable  
            federal agency to the state that the operation of that display  
            will result in the reduction of federal aid highway funds,  
            then the authorization of that display shall cease and the  
            display owner shall remove all advertising copy from the  
            display within 60 days after the state notifies the display  
            owner of the receipt of the federal notice. 

           5. Specifies that failure to remove the advertising copy, as  
             specified, shall result in a civil fine of $10,000 per day  
             until the advertising copy is removed. 

           6. Specifies that the city, county, or city and county adopting  
             the ordinance shall have primary responsibility for ensuring  
             that the displays remain in conformance with all the  
             provision of this bill. 

           7. Specifies that if the city, county, or city and county fails  
             to ensure that the displays remain in conformance with all  
             provisions of the ordinance and this measure after 30 days of  
             receipt of a written notice from Caltrans the city, county,  
             or city and county shall hold Caltrans harmless and indemnify  
             Caltrans for all costs incurred by the department to ensure  
             compliance with the ordinance and this measure or to defend  
             actions challenging the adoption of the ordinance allowing  
             displays. 

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           8. Specifies that an advertising display that was lawfully  
             erected on or before December 31, 2013, in conformity with  
             the law relating to the exemption for advertising displays on  
             arenas, to remain authorized. 

           Comments
           
           Arenas are 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.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

           Initial Caltrans costs of approximately $75,000 to conduct any  
            up-front coordination activities, revise existing regulations  
            regarding outdoor advertising, and inspect newly erected signs  
            (State Highway Account).  

           Ongoing Caltrans staff costs of approximately $35,000 annually  
            to consult with the Secretary of Transportation in reviewing  
            any proposed displays and ordinances, and to annually inspect  
            existing signs (State Highway Account).

           Minor costs to the Secretary of Transportation to review  
            proposed displays and local ordinances.

           SUPPORT  :   (Verified  4/23/13)(Unable to reverify at time of  
          writing)


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          AEG
          Anaheim Ducks
          Asian Business Association
          Farmers Insurance Group
          Greater Los Angeles African American Chamber of Commerce
          Honda Center
          HP Pavilion 
          Latino Business Chamber of Greater Los Angeles
          Major League Soccer
          National Association of Woman Business Owners
          National Hockey League
          State Building and Construction Trades Council

           OPPOSITION  :    (Verified  4/23/13) (Unable to reverify at time  
          of writing)

          California State Outdoor Advertising Association

           ARGUMENTS IN SUPPORT  :    

          According to the author's office, this bill allows for local  
          control while establishing statewide guidelines for advertising  
          displays at professional sports facilities and arenas.  The  
          author's office 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's  
          office 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.

           ARGUMENTS IN 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  

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          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.


          JA:ej:nl  9/6/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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