BILL ANALYSIS Ó
SB 684
Page 1
Date of Hearing: August 12, 2013
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
SB 684 (Hill) - As Amended: May 15, 2013
SENATE VOTE : 34-0
SUBJECT : Advertising displays: redevelopment agency project
areas
SUMMARY : Establishes a process for an advertising display in a
former redevelopment project area to continue to exist if
specified conditions are met. Specifically, this bill :
1)Allows an advertising display located in a former
redevelopment project area that advertises businesses and
activities in the project area to continue to exist and be
treated as an on-premises display if the following conditions
are met:
a) The advertising display is located within the boundaries
of the former project area as they existed on December 29,
2011;
b) The advertising display was constructed, under
construction, or approved for construction by the former
redevelopment agency on or before January 1, 2012; and
c) The advertising display does not cause the reduction of
federal highway funds.
1)Allows an advertising display to continue to exist as an
on-premises display until January 1, 2023.
2)Beginning January 1, 2022, allows a designated agency to
petition the California Department of Transportation
(Caltrans) for an extension for the advertising display, not
to exceed the life of former redevelopment project area, if
the designated agency can show good cause for the extension.
3)Requires a designated agency to ensure that an advertising
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display provides a public benefit and advertises business and
activities in the former project area.
4)Includes an urgency clause.
EXISTING LAW
1)Allows advertising signs that are located within the
boundaries of a redevelopment project area to be considered
on-premises signs anywhere within the limits of the project if
the project area is contiguous or is separated only by a
public highway or public facilities developed or relocated for
inclusion in the project and for a period not to exceed 10
years or the completion of the project, whichever occurs first
(Business and Professions Code Section 5273).
2)Specifies that after the 10-year period, the sign is no longer
considered on-premises, but authorizes the redevelopment
agency to apply to Caltrans for an extension for good cause
(Business and Professions Code Section 5273).
3)Defines an "on-premises advertising display" to mean any
structure, housing, sign, device, figure, statuary, painting,
display, message placard, or other contrivance, or any part
thereof, that has been designed, constructed, created,
intended, or engineered to have a useful life of 15 years or
more, and intended or used to advertise, or to provide data or
information in the nature of advertising, for any of the
following purposes:
a) To designate, identify, or indicate the name or business
of the owner or occupant of the premises upon which the
advertising display is located; and
b) To advertise the business conducted, services available
or rendered, or the goods produced, sold, or available for
sale upon the property where the advertising display has
been lawfully erected (Business and Professions Code
Section 5490).
1)Dissolves redevelopment agencies and institutes a process for
winding down their activities (Health and Safety Code Section
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34170).
FISCAL EFFECT : None.
COMMENTS :
Background : In 2011, facing a severe budget shortfall, the
Governor proposed eliminating redevelopment agencies in order to
deliver more property taxes to other local agencies. Statewide,
redevelopment redirected 12% of property taxes away from schools
and other local taxing entities and into community development
and affordable housing. Ultimately, the Legislature approved and
the Governor signed two measures, ABX1 26 (Blumenfield) and
ABX1 27 (Blumenfield), that together dissolved redevelopment
agencies as they existed at the time and created a voluntary
redevelopment program on a smaller scale. In response the
California Redevelopment Association (CRA) and the League of
California Cities, along with other parties, filed suit
challenging the two measures. The Supreme Court denied the
petition for peremptory writ of mandate with respect to ABX1 26.
However, the Court did grant CRA's petition with respect to ABX1
27. As a result, all redevelopment agencies were required to
dissolve as of February 1, 2012. The city or county that
established the redevelopment agency is responsible for
establishing a successor agency to wind down the affairs of the
redevelopment agency.
Until redevelopment agencies were dissolved, existing law
allowed advertising displays (signs) advertising businesses in a
redevelopment project area and considered them to be on-premises
signs as long as they were located within the limits of the
project area. Caltrans estimates that there are 95 advertising
signs that were located through this authority. Redevelopment
agencies could permit advertising signs in redevelopment project
areas for 10 years, after which they were regulated by Caltrans
and the general Outdoor Advertising Act (OAA) unless the
redevelopment agency and Caltrans agreed to an extension for
good cause. The dissolution of redevelopment agencies raised
questions about how existing signs would be treated by CalTrans
because there is no longer a redevelopment agency to negotiate
an extension with Caltrans.
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Purpose of this bill: According to the author, "due to the
elimination of redevelopment agencies one of the unintended
consequences is that the sign agreements formerly authorized by
redevelopment agencies can no longer be extended because there
is no redevelopment agency to authorize the extension. In
additional to the benefit to local businesses, signs in
pre-existing redevelopment areas provide several sources of
income to local government: they encourage continued economic
investment in the former redevelopment area, they offer
potential adverting revenue opportunities for municipal general
funds, and they are often taxed as real property improvements."
Outside Advertising Act ( OAA) : The 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 premises" 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 governments regulate on-premises displays,
except for certain safety requirements. Existing law includes a
number of exceptions to the OAA and assigns Caltrans the
responsibility of reviewing and permitting signs that qualify
for these exceptions. Under the OAA, displays advertising those
businesses and activities within the boundaries of an individual
redevelopment agency project area are considered on-premises
displays for an initial period of 10 years or until the project
area expires, whichever occurs first. Caltrans may for good
cause extend the permits for these signs beyond the initial 10
years, but not beyond the life of the redevelopment project
area.
Exemption from the OAA for redevelopment agencies: Redevelopment
agencies were formed after World War II to eradicate blight by
freezing the property tax rate in a project area and divert any
increase in property taxes toward redeveloping the project area.
Agencies were required to make a finding that blight existed
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before establishing a project area. Redevelopment agencies were
given an exception to the OAA in an effort to give the
businesses in the project area an advantage in attracting
travelers who may have avoided the blighted areas. The exception
allowed the signs to be considered an on premise sign, subject
to approval by the redevelopment agency, and located anywhere in
the project area, including along the right-of-way of a highway.
The theory was that helping businesses in the project area to
succeed would help to achieve the goal of redevelopment to
reduce blight. Signs were initially permitted by the
redevelopment agency for 10 years, after which they became
subject to the OAA and Caltrans oversight, and could receive an
extension if local governments and Caltrans agreed to the
extension for good cause. The sign could only be in place for
as long as the project area existed which was generally up to 40
years.
Enforcement : Advertising signs in redevelopment project areas
are limited to advertising businesses in the project area.
There have been abuses of this restriction in the past and to
address this issue this bill would require the successor agency,
usually the city or county that created the redevelopment
agency, to enforce this limitation and ensure that the sign
provides a public benefit. The author's intent is that Caltrans
continue to have authority to cite signs that are out of
compliance with OAA. The committee may wish to clarify this
point.
Good cause : This bill allows a successor agency, beginning in
2023, to apply to Caltrans for an extension to allow an
advertising sign to continue to exist if the successor agency
can show good cause. Good cause is not defined in the bill,
leaving it up to the successor agency to decide if the sign
should continue. The committee may wish to consider whether the
bill should define good cause to include the existence of
blight. Alternatively, the extension could be restricted if the
successor agency was found to have violated the prohibition on
advertising businesses outside of the project area.
Arguments in opposition : The California State Outdoor
Advertising Association (CSOAA) is opposed to SB 684 because
they believe that the bill has removed Caltrans' oversight and
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enforcement responsibilities and shifted the job to the
successor agency. CSOAA argues that the better approach is to
use the current regulations in Caltrans Outdoor Advertising Act
to allow conversion of the displays to private companies. This
would allow advertising displays in former redevelopment project
areas to be treated like other billboards.
Committee amendment:
On page 3, line 18 insert the following after "benefit", " This
shall not be interpreted to preclude any Caltrans enforcement
authority under The Outdoor Advertising Act."
Double referred : The bill passed the Committee on Governmental
Organization on August 7, 2013, by a vote of 15-0.
REGISTERED SUPPORT / OPPOSITION :
Support
California Sign Association (Co-Sponsor)
League of California Cities (Co-Sponsor)
California New Car Dealers Association
California State Association of Counties
Circle Automotive Group, Santa Ana
City of Huntington Beach
City of Inglewood
City of South Gate
Opposition
California State Outdoor Advertising Association
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085