BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 694
                                                                  Page  1

          Date of Hearing:   June 26, 2013

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                                 Isadore Hall, Chair
                      SB 694 (Correa) - As Amended:  May 2, 213

           SENATE VOTE  :   34-3
           
          SUBJECT  :   Outdoor advertising: transit stations

           SUMMARY  :   Exempts from the Outdoor Advertising Act (OAA)  
          advertising displays at current or future high-speed rail  
          stations.  Specifically,  this bill  :   

          1)Exempts from the OAA  advertising displays at current or  
            future high-speed rail stations only if the following  
            requirements are met:

             a)   It is publicly owned and operated and is located on  
               public land.

             b)   It is identified as a critical component in the region's  
               sustainable communities strategy, as described.

             c)   One of the modes of transportation served at the  
               multimodal transit facility is a passenger rail.

          2)Specifies that in order to advertise any products, goods, or  
            services, all of the following shall apply:

             a)   The advertising display shall be on the same side of the  
               highway and within 1,000 feet of an entrance to a  
               multimodal transit facility.

             b)   The advertising display shall not advertise products,  
               goods, or services related to distilled spirits, tobacco,  
               firearms, or sexually explicit material.

             c)   Beyond the cost of erection, revenues from the  
               advertising display shall be used to support the  
               construction, operations, and maintenance of the multimodal  
               transit facility.

             d)   The advertising display shall not cause a reduction in  
               federal aid highway funds.








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          3)Specifies that any advertising display shall be authorized by  
            a local ordinance, adopted by the city or county that  
            regulates advertising displays by either identifying the  
            specific displays or by establishing regulations that include,  
            at a minimum, all of the following:

             a)   The number of signs and total signage area allowed.

             b)   The 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.

          4)Specifies that authorization of an advertising display shall  
            be subject to the owner of the display submitting, to the High  
            Speed Rail Authority (HSRA), a copy of the ordinance  
            authorizing the display that has been adopted by the  
            applicable city or county.

          5)Requires the HSRA to review and certify that the proposed  
            display and the ordinance meet the minimum requirements,  
            including that the multimodal transit facility is or will be a  
            current or future station for the high-speed train system.

          6)Specifies that nothing in this bill limits a city or county  
            from adopting an ordinance that further restricts the size,  
            number, or types of advertising displays authorized by this  
            bill. 

           EXISTING LAW  

          1)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.

          2)Provides, through the OAA, for regulation by the Department of  








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            Transportation of advertising displays, as defined, within  
            view of public highways.

          3)The OAA exempts from its provisions certain advertising  
            displays that advertise the business conducted, services  
            rendered, or goods produced or sold on the property upon which  
            the display is placed, as specified.

          4)The OAA exempts from its provisions specified advertising  
            displays at an arena located on public land with a capacity of  
            5,000 seats or more that provides a permanent venue for  
            professional sports, and that advertise products, goods, or  
            services that are or will be sold on the premises of the arena  
            on a regular basis pursuant to a specified agreement. 

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

           Purpose of the bill  :  According to the author, SB 694 provides  
          an exemption to the OAA for high-speed rail stations when  
          certain requirements are met.

          The author further states that significant economic development  
          and job creation result from the building and operation of large  
          transit stations that can accommodate the high speed rail train.  
           However, the ongoing costs to operate the facilities can be  
          considerably high.  Estimates contained in High Speed Rail  
          Authority's (HSRA's) most recent business plan, indicated that  
          the project will cost at least $68 billion.  This estimate does  
          not include the build-out and ongoing operational and  
          maintenance costs associated with high speed rail stations,  
          which the HSRA assumes will be funded by local agencies.

          By authorizing on-site advertising, SB 694 promotes the creation  
          of public private partnerships, which help local agencies defray  
          operational and maintenance costs of high speed rail transit  
          stations.

           The Anaheim Regional Transportation Intermodal Center (ARTIC):    
          Set to open in in late 2014, ARTIC is a planned 67,000 square  
          feet terminal that will combine a transportation gateway and  
          mixed-use activity center on a 16-acre site owned by the City of  
          Anaheim.  Upon opening, ARTIC will serve as a major  
          transportation hub for Orange County and the region where  








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          freeways, major arterials, bus routes and Orange County's rail  
          system will converge.  ARTIC will increase mobility options for  
          residents, business, commuters and local and international  
          visitors to Anaheim, Orange County and the entire Southern  
          California region. ARTIC will also accommodate planned  
          high-speed rail, linking the state's major population centers,  
          including Sacramento, the San Francisco Bay Area, the Central  
          Valley, Los Angeles, Inland Empire, Orange County, and San  
          Diego.

          According to their website, the vision of ARTIC is to be a  
          transportation facility where people will seamlessly move  
          between transit services to reach Southern California activity  
          centers and business districts. Transit oriented development in  
          the immediate area will integrate with ARTIC to form a vibrant  
          Southern California community.  Together, it will represent  
          Orange County's continuing transformation from rural farmland  
          and suburban community to a thriving metropolis. 

          The project is estimated to cost approximately $188 million and  
          is estimated to create about 5,000 jobs.

           ARTIC funding sources  :  According to the City of Anaheim, the  
          city is seeking to implement an on-site sponsorship program to  
          support operation and maintenance of the ARTIC facility.  While  
          the bulk of the capital funding come from local Measure M1 and  
          M2 funds, the project also uses some state and federal sources  
          for the capital investment.  Funding for operation and  
          maintenance is expected to be funded through a sponsored  
          advertising program. 

          The primary purpose of the proposed sponsorship program is to  
          generate revenues for day-to-day operations and long term  
          maintenance of capital assets at ARTIC, including facilities  
          management. According to the City of Anaheim, sponsorship  
          revenues are projected to generate approximately $6,070,000 over  
          the first three years.  This revenue source will be used to pay  
          92% of operation and maintenance expenses during that time  
          period. 

           Outdoor Advertising Act  :  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  








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          or maintained on property adjacent to a section of landscaped  
          highway.

          The OAA generally does not apply to "on premise" advertising  
          displays, which includes 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.

           Federal Highway Beautification Act of 1965  :   The Highway  
          Beautification Act (HBA) was created to protect the public  
          investment, promote the safety and recreational value of public  
          travel, and to preserve the natural beauty of highways in the  
          nation.

          The HBA specifies that states have the responsibility to enforce  
          provisions regarding the placement and maintenance of outdoor  
          advertising signs, displays and devices along the Interstate and  
          National Highway System.  The state of California enforces the  
          provisions of federal law through a compact that was developed  
          between the state and the federal government in 1967.  Federal  
          law also includes a penalty for states that violate the HBA by  
          reducing all federal highway transportation funds to the state  
          by 10%.

           Arguments in support  :  The City of Anaheim writes in support of  
          the bill stating that SB 694 is an important measure that  
          authorizes local agencies which will build and operate future  
          high speed rail stations to establish an advertising display  
          program.  The bill provides significant local control so the  
          jurisdiction in which the displays will be located can determine  
          the number, spacing, illumination, and hours of operation.

          Supporters further argue that significant economic development  
          and job creation results from the building and operating of  
          large transit stations that can accommodate the high speed rail  
          train.  However, the ongoing costs to operate the facilities can  
          be considerable.  On-site advertising, as authorized by this  
          bill, will help local communities to defray the operational and  
          maintenance costs of these transit stations and reduce the need  
          for taxpayer offsets.

           Related Legislation  :  SB 31 (Padilla). Recasts the arena  
          advertising exception to exempt from the OAA specified  








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          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. (Pending in Assembly Appropriations Committee)

          SB 694 (Hill).  Recasts the redevelopment agency exemption to  
          the Outdoor Advertising Act (OAA) to reflect the elimination of  
          redevelopment agencies. (Pending in Assembly Governmental  
          Organization Committee)

           Previous Legislation  : AB 2339 (Solorio), Chapter 493, Statutes  
          of 2008.  Expanded the definition of an "on premise" display to  
          include those displays advertising products, goods, or services  
          sold on the premises of an arena of at least 5,000 seats and is  
          located on public land, provided certain conditions were met.  

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          City of Anaheim (Sponsor)
          Orange County Business Council
           
            Opposition 
           
          None on file

           Analysis Prepared by  :    Felipe Lopez / G. O. / (916) 319-2531