BILL ANALYSIS                                                                                                                                                                                                    Ó


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                                 UNFINISHED BUSINESS

          Bill No:  SB 694
          Author:   Correa (D)
          Amended:  9/3/13
          Vote:     21

          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  


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          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  



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          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  

             A.   Be located on public property and be publicly owned and  

             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  

           1. Requires the advertising display meet all of the following  

             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.



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             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  

           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. 



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             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. 

           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  

          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  



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          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  

          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  



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          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

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