BILL ANALYSIS                                                                                                                                                                                                    

                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 1373           Hearing Date:     6/28/16
          |Author:   |Santiago                                              |
          |Version:  |9/2/2015                                              |
          |Urgency:  |Yes                    |Fiscal:      |Yes             |
          |Consultant|Randy Chinn                                           |
          |:         |                                                      |

          SUBJECT:  Outdoor advertising:  City of Los Angeles

            DIGEST:  This bill provides an exemption from regulations of the  
          Outdoor Advertising Act (OAA or Act) for signs allowed by a City  
          of Los Angeles ordinance in relation to the number and location  
          of billboards in an area bounded by West 8th Street on the  
          northeast, South Figueroa Street on the southeast, Interstate 10  
          on the southwest, and State Route 110 on the northwest, if  
          certain conditions are satisfied.  

          Existing law:
          1)Establishes the OAA, which regulates the placement of  
            advertising displays adjacent to and within specified  
            distances of highways that are part of the national system of  
            interstate, defense highways, and federal-aid highways.  

          2)Prohibits any advertising display from being placed or  
            maintained on property adjacent to a section of a freeway that  
            has been landscaped if the advertising display is designed to  
            be viewed primarily by persons traveling on the main-traveled  
            way of the landscaped freeway.  

          3)Provides for limited exemptions to the prohibition on  
            advertising along system and landscaped freeways, including  
            exemptions for signs advertising the property's sale or lease,  
            signs designating the premises or its owner, and signs  


          AB 1373 (Santiago)                                 Page 2 of ?
            advertising goods or services manufactured or produced on the  
            property itself. 

          4)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.

          5)Allows a single advertising structure exemption for each of  
            several cities, including an exemption for advertising on  
            street furniture in San Francisco, several billboards situated  
            on the grounds of the Oakland-Alameda County Coliseum complex,  
            and structures within the Mid-City Recovery Redevelopment  
            Project Area within Los Angeles.

          6)Requires the Department of Transportation (Caltrans) to assess  
            penalties for a violation of the OAA, as specified.  If an  
            advertising display is placed or maintained in a location that  
            does not conform to the relevant statutes or local ordinances,  
            and is not removed within thirty days of written notice from  
            the department or the city or the county with land use  
            jurisdiction over the property upon which the advertising  
            display is located, a penalty of $10,000 plus $100 for each  
            day the advertising display is placed or maintained after the  
            department sends written notice shall be assessed and the  
            gross revenues received by the violator shall be disgorged.   
            Caltrans may also request recovery of its legal costs.

          7)Provides, by contractual agreement, for Caltrans to administer  
            the federal Outdoor Advertising Control (OAC) program, which  
            has restrictions similar to California's OAA program,  
            including maximum sign size, sign spacing, location,  
            illumination, and content.  If the state fails to properly  
            administer the federal program, the state shall lose 10% of  
            its federal highway funding.

          This bill:

          1) Provides an exemption from regulations of the OAA for signs  
            allowed by a City of Los Angeles ordinance in relation to the  
            number and location of billboards in an area bounded by West  
            8th Street on the northeast, South Figueroa Street on the  
            southeast, Interstate 10 on the southwest, and State Route 110  


          AB 1373 (Santiago)                                 Page 3 of ?
            on the northwest.  

          2)Requires the City of Los Angeles ordinance to provide for all  
            of the following:
             a)   Maximum number of signs and total signage allowed
             b)   Maximum individual signage area
             c)   Minimum sign separation
             d)   Illumination restrictions
             e)   Illuminated sign hours of operation

          1)Prohibits the advertising display from advertising products,  
            goods, or services related to tobacco, firearms, or sexually  
            explicit material.

          2)If the advertising display is subject to notice from the  
            Federal Highway Administration that the operation of the  
            display will result in the reduction of federal highway funds,  
            the authorization of the display shall cease and the owner  
            shall remove all advertising copy within 60 days.

          3)This is an urgency bill.


          1)Purpose.  According to the author, the purpose of this bill is  
            to allow the use of revenue generating advertising displays  
            within a small area of downtown Los Angeles.  The author  
            believes this bill will spur the construction of needed hotels  
            in support of the Los Angeles Convention Center, the Sports  
            and Entertainment District, and the City's financial district.  
             The bill also empowers the City of Los Angeles to control its  
            urban streetscape and interface with the state highways  
            bisecting its urban core, according to the author.

          2)Where?  The area affected by this bill is described by the  
            author as a small area of downtown Los Angeles known as the  
            Avenue of the Angels.  It encompasses an area approximately  
            eight blocks long adjacent to State Route 110 and Interstate  
            10.  This area is a major entertainment and commercial area  
            encompassing the Los Angeles Convention Center, the Stables  
            Center, the Nokia Theatre, and a Marriott hotel.  The freeways  
            in this area are among the most heavily traveled in the state,  
            carrying about 20,000 cars per hour.

          3)Creating a conflict.  This bill creates a conflict between the  


          AB 1373 (Santiago)                                 Page 4 of ?
            desire of Los Angeles to raise funds from billboards to  
            support local development, and the responsibility of the state  
            to ensure driver safety through the administration of state  
            law and the federal Control OAC program.  From the perspective  
            of the city, billboard revenue will be maximized with more  
            signs that attract the attention of drivers, whether through  
            the number of signs, their location, brightness, or attractive  
            content.  From the perspective of the state, catchier signs  
            distract drivers, which will lead to more accidents and  
            injury, particularly along a heavily traveled freeway with  
            numerous merges, onramps and off-ramps.

          4)Caltrans enforcement.  State law contains numerous billboard  
            restrictions intended to prevent compromising driver safety  
            and cluttering the freeway.  These include restrictions on the  
            sign size, location, and proximity to similar signs, lighting  
            and content.  Many of these provisions are similar to those  
            contained in federal law, originally established in 1965  
            through the Lady Bird Johnson Highway Beautification Act.  In  
            1968 Caltrans entered into a contractual agreement with the  
            Federal Highway Administration (FHA) to implement and enforce  
            federal law.  The penalty for failure to enforce federal law  
            is severe: 10% of federal highway funds with the potential to  
            apply the penalty retroactively.  In the face of such  
            penalties it is not surprising that Caltrans is doing a good  
            job upholding its obligations under the contract.  In 2012 the  
            FHA reviewed Caltrans' effectiveness and was quite  
            complimentary, specifically noting significant improvement  
            since the prior FHA review.  However, the review was not  
            without suggestions for improved enforcement.

          5)Permission, not forgiveness.  The provision requiring removal  
            of the advertising display if found in violation of the  
            state's contract with FHA (subdivision (b) of the bill) should  
            be revised, as it could easily lead to wasted expenditures and  
            costly litigation.  This is because that provision only  
            provides for after-the-fact enforcement.  At that point,  
            millions of dollars and months of time will have been spent on  
            billboards which could be unusable if found in violation of  
            federal law by Caltrans or the FHA.  The penalties for illegal  
            billboards are significant, including fines, disgorgement of  
            profits, and legal fees. A more cost-effective process would  
            be to obtain preapproval of the signs, from either Caltrans or  
            the FHA, before they are erected.  This was the process used  
            in legislation authorizing billboards at the Oakland Coliseum.  


          AB 1373 (Santiago)                                 Page 5 of ?
             The author and committee may wish to revise the bill to  
            reflect this more cost effective mechanism.
          6)Local control, state responsibility.  This bill allows Los  
            Angeles to develop its own billboard regulations, while the  
            state retains the responsibility for enforcing the specific  
            provisions of the federal OAC program.  This gives Los Angeles  
            some flexibility, though that flexibility is constrained by  
            the federal OAC that restricts billboard spacing, location,  
            size, illumination, and content.  The bill provides for Los  
            Angeles to hold Caltrans harmless if the city fails to enforce  
            compliance with the legislation.

          7)Whose sign?  There have been concerns from the outdoor  
            advertising industry about whether they will have an  
            opportunity to compete to provide the advertising display  
            and/or the content of that display.  The author and the  
            industry continue to discuss this issue.

          8)Speech.  Some opponents raise concerns that the prohibition  
            against advertising firearms is unconstitutional.  The  
            language in the bill contains the same content restrictions as  
            SB 31 (Padilla, Chapter 542 of 2013 - authorized advertising  
            displays for products, goods, or services sold at specified  
            arenas) which passed both houses of the Legislature without a  
            "no" vote on either floor; SB 694 (Correa, Chapter 545 of 2013  
            - authorized advertising displays at public transit  
            terminals), and AB 2339 (Solorio; Chapter 493 of 2008 -  
            authorized advertising displays at publicly owned sports  

          9)Waiving committee policy.  This committee has a policy not to  
            hear bills which create specific exemptions from the Outdoor  
            Advertising Act.  The committee will need to waive its policy  
            to hear this bill.

          Related Legislation:
          AB 400 (Alejo; Chapter 693 of 2015) - Required Caltrans, by June  
          30, 2016, to update its internal policies to allow displays of  
          safety, transportation-related, and voting-related messages on  
          changeable message signs, as defined, subject to approval by the  
          United States Department of Transportation.

          SB 31 (Padilla; Chapter 542 of 2013) - Allows for local control  


          AB 1373 (Santiago)                                 Page 6 of ?
          while establishing statewide guidelines for advertising displays  
          at professional sports facilities and arenas.

          SB 684 (Hill; Chapter 544 of 2013) - Amends the redevelopment  
          agency exemption to the Outdoor Advertising Act to reflect the  
          elimination of redevelopment agencies.

          SB 190 (Perata; Chapter 54 of 2001) - Exempted from the OAA the  
          prohibition against placing advertising displays adjacent to  
          landscaped freeways, up to five advertising structures or signs  
          (billboards) used to support the Oakland-Alameda County Coliseum  

          Assembly Votes
               Floor:              1-6
               Appropriations:     16-1
               G.Org.:             19-1
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  No

            POSITIONS:  (Communicated to the committee before noon on  
                          June 22, 2016.)

          Greenland USA
          Hanjin International Corporation


          California Association of Federal Firearms Licensees
          Coalition to Ban Billboard Blight
          Firearms Policy Coalition

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