BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 694| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 694 Author: Correa (D) Amended: 9/3/13 Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 10-1, 4/30/13 AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso, Lara, Liu, Roth, Wyland NOES: Pavley SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 34-3, 05/28/13 AYES: Beall, Berryhill, Block, Calderon, Cannella, Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Knight, Lara, Leno, Lieu, Nielsen, Padilla, Price, Roth, Steinberg, Torres, Walters, Wolk, Wright, Wyland, Yee NOES: Anderson, Jackson, Liu NO VOTE RECORDED: Monning, Pavley, Vacancy ASSEMBLY FLOOR : Not available SUBJECT : Outdoor advertising: transit stations SOURCE : City of Anaheim DIGEST : This bill exempts, from the Outdoor Advertising Act (OAA), advertising displays at a publicly owned multimodel transit facility (MTF) that is to serve as a station for the CONTINUED SB 694 Page 2 high-speed train system, as specified, and requires revenues from the advertising display to be used to support the construction, operation, and maintenance of the MTF. 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) remove the prohibition on the advertising of distilled spirits on the displays. ANALYSIS : 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 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. Existing law created the California High-Speed Rail Authority (HSRA) in 1996 to direct development and implementation of inter-city high-speed rail service that is fully coordinated with other public transportation services. In 2008, voters approved Proposition 1A (Prop 1A) authorizing $9.95 billion in general obligation bonds for the project. Prop 1A identified the first phase of the project to be a corridor between the Transbay Terminal in San Francisco and Anaheim and include Los Angeles' Union Station. Prop 1A further identified a number of future potential destinations after the first phase is CONTINUED SB 694 Page 3 completed, such as Sacramento, Oakland, and San Diego. According to HSRA's most recent business plan, completion of the first phase of the high-speed rail project will cost at least $68 billion. This estimate does not include the build-out of stations, with the expectation that local governments will plan for and fund stations based on local preferences. To date, HSRA has secured roughly $13.6 billion to develop and construct the project, leaving a roughly $55 billion deficit HSRA still needs to address from sources yet to be identified. This bill: 1. Exempts, from the OAA, advertising displays at current or future high-speed rail stations. In order to qualify for the exemption, this bill requires the MTF meet the following requirements: A. Be located on public property and be publicly owned and operated. B. Be identified as a critical component in the region's sustainable communities strategy. C. One of the modes of transportation served at the facility is passenger rail. D. Is a current or future high-speed rail station along the first phase of the system between San Francisco and Anaheim. 1. Requires the advertising display meet all of the following requirements: A. The displays must be on the same side of the highway and within 1000 feet of an entrance to a MTF. B. The displays cannot advertise, tobacco, firearms, or sexually explicit material. C. Revenues from the display, minus cost of erection, are used to support the construction, operations, and maintenance of the MTF. CONTINUED SB 694 Page 4 D. Cannot cause a reduction in federal aid highway funds. 1. Clarifies that if the Federal Highway Administration, or any other applicable federal agency to the state provide notice 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. 2. Specifies that the failure to remove the advertising copy, as specified, shall result in a civil fine, imposed by Caltrans, of $10,000 per day until the advertising copy is removed. 3. Specifies that Caltrans shall not assume any liability in connection with cessation of operation or removal of advertising display or advertising copy. 4. Specifies that that the city, county, or city and county adopting the ordinance shall have the primary responsibility for ensuring that the displays remain in conformance with the provisions of this measure. 5. 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 the Caltrans, the city, county, or city and county shall hold Caltrans harmless and indemnify Caltrans for all costs incurred by Caltrans to ensure compliance with the ordinance and this measure or to defend actions challenging the adoption of the ordinance allowing displays. 6. Specifies that any advertising display shall be lawful only if 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. CONTINUED SB 694 Page 5 C. Minimum sign separation. D. Illumination restrictions and regulations, including signage refresh rate, scrolling, and brightness. E. Illuminated sign hours of operation. 1. Specifies that authorization of an advertising display shall be subject to the owner of the display submitting, to HSRA, a copy of the ordinance authorizing the display that has been adopted by the applicable city or county. 2. 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. 3. Specifies that nothing in this bill limits a city, county, or city and county from adopting an ordinance prohibiting or further restricting the size, number, or types of advertising displays authorized by this bill. Comments 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 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 CONTINUED SB 694 Page 6 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (per Assembly Governmental Organization Committee analysis of 6/26/13 - unable to reverify at time of writing) City of Anaheim (source) Orange County Business Council ARGUMENTS IN SUPPORT : According to the author's office, this bill provides an opportunity to utilize a public-private partnership to partially fund the construction, operation, and maintenance of high-speed rail station areas. The author's office contends that construction and operation of large transit stations, particularly once the stations begin servicing high-speed trains, will result in significant economic development and job creation. The ongoing costs to operate such facilities, however, can be considerable. Advertising revenue, as authorized by this bill, will help local communities defray these costs and reduce the need for taxpayer offsets. In this CONTINUED SB 694 Page 7 way, the author's office contends, this bill promotes the development of high-speed rail and creates another tool to fund and deliver this important state priority. JA:nl:ej 9/6/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED