BILL ANALYSIS                                                                                                                                                                                                    



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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1373 (Santiago)


          As Amended  August 19, 2016


          Majority vote


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          Original Committee Reference:  G.O.


          SUMMARY:  Provides an exemption from regulations of the Outdoor  
          Advertising Act (OAA) for specific geographic areas in the City  
          of Los Angeles if those displays meet specified conditions and  
          requirements.  Specifically, this bill:  


          1)Exempts from specific provisions of the OAA, any advertising  
            display located in the geographic area in the City of Los  
            Angeles bounded by W. 8th Street on the northeast, S. Figueroa  
            Street on the southeast, Interstate 10 on the southwest, and  
            State Route 110 on the northwest, or to any advertising  
            display located in the geographic area in the City of Los  
            Angeles on the westerly side of State Route 110 bounded by  
            West 8th Place, James M. Wood Boulevard, and Golden Avenue, if  
            all of the following conditions are met:
             a)   The advertising display is authorized by, or in  
               accordance with, an ordinance, including, but not limited  
               to, a specific plan or sign district, adopted by the City  








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               of Los Angeles that regulates advertising displays by  
               identifying the specific displays or establishing  
               regulations that include, at a minimum, all of the  
               following:
               i)     Number of signs and total signage area allowed.
               ii)    Maximum individual signage area.


               iii)   Minimum sign separation.


               iv)    Illumination restrictions and regulations, including  
                 signage refresh rate, scrolling, and brightness.


               v)     Illuminated sign hours of operation.


          2)Requires at least 500 feet between any two advertising  
            displays located on the same side of the freeway unless the  
            advertising displays are separated by buildings or other  
            obstructions in a manner that only one of the advertising  
            displays is visible from any given location on the freeway.
          3)Provides the above spacing requirement in does not apply to an  
            advertising display that advertises only the business  
            conducted, services rendered, or goods produced and sold upon  
            the property upon which the advertising display is located.


          4)Specifies that the owner of the advertising display has  
            submitted to the California Department of Transportation  
            (Caltrans) a copy of the ordinance adopted by the City of Los  
            Angeles authorizing the advertising display and identification  
            of the provisions of the ordinance required, as defined and  
            the department has certified that the ordinance meets designed  
            minimum requirements.


          5)Provides the advertising display will not advertise products,  
            goods, or services related to tobacco, firearms, or sexually  
            explicit material.









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          6)Provides this bill would not limit the City of Los Angeles  
            from adopting ordinances prohibiting or further restricting  
            the size, number, or type of advertising displays permitted by  
            this legislation.


          7)Provides that if the advertising display is a message center,  
            the owner of the display shall do one of the following:


             a)   Makes the message center display available on a  
               space-available basis for use by Caltrans or the Department  
               of the California Highway Patrol (CHP) for public service  
               messages, including Emergency Alert System (Amber Alert)  
               messages, as defined, and messages containing, among other  
               things, reports of commute times, drunk driving awareness  
               messages, reports of accidents of a serious nature, and  
               emergency disaster communications.
             b)   Makes a message center display not subject to the  
               provision that is under the control of the owner of the  
               advertising display available on a space-available basis  
               for public service messages in a location acceptable to  
               Caltrans and CHP.


             c)   Provides funding to Caltrans for the installation of a  
               message center display to accommodate those public service  
               messages, which may include funding as part of mitigation  
               in connection with the approval of development of the  
               property on which the message center display is located by  
               the City of Los Angeles.


          8)Requires Caltrans, before the advertising display may be  
            placed, to determine or to request the Federal Highway  
            Administration (FHA) to determine that the display will not  
            cause a reduction in federal aid funds or otherwise be  
            inconsistent with any federal law, regulation, or agreement  
            between the state and a federal agency or department.
          9)Makes the City of Los Angeles primarily responsible for  
            ensuring that a display remains in compliance with the  








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            ordinance and the bill's requirements, and would require the  
            city to indemnify and hold Caltrans harmless if the city fails  
            to do so.


          10)Makes findings and declarations as to the need for a special  
            statute relating to the specified areas in the City of Los  
            Angeles.


          The Senate amendments 


          1)Require Caltrans, before the advertising display may be  
            placed, to determine or to request the Federal Highway  
            Administration (FHA) to determine that the display will not  
            cause a reduction in federal aid funds or otherwise be  
            inconsistent with any federal law, regulation, or agreement  
            between the state and a federal agency or department.


          2)Expand exempted area to include any advertising display  
            located in the geographic area in the City of Los Angeles on  
            the westerly side of State Route 110 bounded by West 8th  
            Place, James M. Wood Boulevard, and Golden Avenue.


          3)Require at least 500 feet between any two advertising displays  
            located on the same side of the freeway unless the advertising  
            displays are separated by buildings or other obstructions in a  
            manner that only one of the advertising displays is visible  
            from any given location on the freeway.


          4)Provide the above spacing requirement in does not apply to an  
            advertising display that advertises only the business  
            conducted, services rendered, or goods produced and sold upon  
            the property upon which the advertising display is located.


          EXISTING LAW:  









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          1)Establishes 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  
            and 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.  The OAA, however, only applies  
            to signs that are located within 660 feet of the right-of-way  
            of federal-aid interstate and primary highways.


          3)Provides for limited exemptions and specified exceptions 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 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 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  
            provisions of this chapter or local ordinances, and is not  








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            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.


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.


          COMMENTS:  Purpose of the bill:  According to the author, this  
          bill proposes to allow for the use of revenue-generating  
          advertising displays within a small area of Downtown Los Angeles  
          with the City of Los Angeles consent.


          The author's office states, according to a recent report, the  
          City of Los Angeles has lost $5 billion in economic development  
          over the last four years alone due to a lack of hotel rooms and  
          an outdated Los Angeles Convention Center.  Studies have shown  
          that an additional two to three thousand-hotel rooms together  
          with hotel facilities such as meeting and banquet rooms are  
          needed to fully support the Convention Center.  


          According to the information provided by the author, the Los  
          Angeles' Metropolis Project (Project) is a 6.3-acre, $1 billion  
          development adjacent to LA Live that has taken nearly three  
          decades to come to fruition.  The development, which broke  
          ground in the summer of 2014, will be composed of four towers:  
          1) an 18-story boutique hotel - Hotel Indigo - set to open in  
          October 2016; 2) a 38-story residential tower; 3) a 40-story  
          residential tower; and 4) a 52-story residential tower.


          The Project is expected to bring $156.7 million in tax revenue  
          into the City over the next 25 years, 20,000 construction jobs  
          over the next four or five years, and 500 permanent jobs upon  
          completion.  The project will also add 350 hotel rooms (with  
          meeting and event facilities), substantial restaurant and retail  








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          space, as well as 1,560 residential units to the Convention  
          Center area.  In addition, Anschutz Entertainment Group (AEG)  
          recently announced a 755-room expansion of its Marriott Hotel  
          located at LA Live between the Convention Center and the  
          Metropolis Project.


          The author states, this measure will spur the construction of  
          needed hotels in support of the City's Convention Center, the  
          Sports & Entertainment District, and the Project's link to the  
          City's financial district.  It also empowers the City of Los  
          Angeles to control its urban streetscape and interface with the  
          state highways bisecting its urban core.  With the completion of  
          the Project, the expansion and revitalization of the Convention  
          Center, and the addition of hotel rooms in the Sports and  
          Entertainment District, over the next several years, the area  
          covered by this bill will become a central tourist, convention,  
          sports, and entertainment destination for people from all over  
          the world. 


          The author points out, this bill only affects signage within the  
          few blocks east of Interstate 110, north of Interstate 10, south  
          of 8th Street, and west of Figueroa Street in the City of Los  
          Angeles.  These blocks are very different from other  
          freeway-facing areas in California in that they are highly  
          urbanized and contain a dense proliferation of convention,  
          entertainment, sports, and hotel uses.  This measure retains  
          local control by allowing the City of Los Angeles to determine  
          the amounts and types of safe signage to be placed at its  
          gateway.  It also allows the City of Los Angeles to require  
          public benefits that enhance traffic safety and aesthetics in  
          the streets within and surrounding the area. 


          The author points out that this bill additionally requires any  
          corresponding ordinance within the City of Los Angeles to  
          include protections to prevent signage from becoming overly  
          distracting, misleading, or disruptive.  This corresponds with  
          similar limitations set forth in the OAA.   For large  
          developments - especially those that fall within the sports and  
          entertainment industries - the ability to generate revenue via  








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          the use of near-freeway signage for off-site sponsors  
          dramatically decreases the overhead costs of construction  
          projects to taxpayers.


          The author concludes that this bill is an important step towards  
          ensuring that current and future developments within the  
          revitalized Downtown Los Angeles area will be able to tap into  
          this increasingly critical financing source to backfill the  
          decrease in public funding available for such purposes.


          Background:


          Outdoor Advertising Act:  The OAA regulates the placement of  
          advertising displays (i.e., billboards) and signs along  
          interstate or primary highways, landscaped freeways and similar  
          specified highways.  The OAA must also generally conform to  
          various federal laws, including the Highway Beautification Act  
          of 1965 (23 United States Code Section (USC) 131 et seq.).  


          The OAA sets standards for the structures, including their size,  
          identification and location, and requires compliance with  
          application procedures and conditions administered by Caltrans.   
          The OAA 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.


          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.


          While state and federal law generally regulates billboards and  








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          similar advertising displays, local governments may also impose  
          restrictions equal to or greater than any restriction imposed by  
          state law, but local governments may not allow a display that is  
          in violation of state law.  Local governments are also entitled  
          to a portion of fees and fines under the state law, and they may  
          also require advertisers to obtain licenses and permits, in  
          addition to any licenses required by state law.  


          The OAA provides for general exemptions and specified exceptions  
          to the prohibition on advertising along landscaped freeways,  
          including exemptions for signs advertising the property's sale  
          or lease, signs designating the premises or its owner, and signs  
          advertising goods or services manufactured or produced on the  
          property itself.  In addition, since 1995, a number of bills  
          have created exemptions for specific cities, including an  
          exemption for advertising on "street furniture" in San  
          Francisco, five signs situated on the property of the  
          Oakland-Alameda County Coliseum complex, one sign each in the  
          cities of Costa Mesa and Richmond, and four signs within the  
          Mid-City Recovery Redevelopment Project Area within Los Angeles.


          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.


          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 HBA by  
          reducing all federal highway transportation funds by a  
          designated percentage.


          Prior legislation: SB 31 (Padilla), Chapter 542, Statutes of  








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          2013.  Recasts an arena advertising exception to exempt from the  
          OAA specified 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.  In essence, the bill allows for local  
          control while establishing statewide guidelines for advertising  
          displays at professional sports facilities and arenas.


          SB 684 (Hill), Chapter 544, Statutes of 2013.  Amended the  
          redevelopment agency (RDA) exemption to OAA to reflect the  
          elimination of redevelopment agencies.


          SB 694 (Correa), Chapter 545, Statutes of 2013.  Exempted, from  
          the OAA, advertising displays at a publicly owned multimodel  
          transit facility (MTF) that is to serve as a station for the  
          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.


          AB 2566 (Hill) of 2012.  Would have provided an exemption from  
          the regulations of the OAA for an advertising display located on  
          State Route 1, in the County of San Mateo, if certain conditions  
          are satisfied.  (This bill died in the Senate.)


          SB 402 (Vargas) of 2011.  Would have provided an exemption from  
          the regulations of the OAA for an advertising display located  
          within 1,800 feet of the intersection of State Highway Routes 8  
          and 111 in the County of Imperial if certain conditions are  
          satisfied.  (This bill died in Senate Rules Committee)


          AB 2756 (Blumenfield), Chapter 615, Statutes of 2010.  Defines  
          "mobile billboard advertising display" and allows a local  
          authority to regulate these displays.


          AB 2339 (Solorio), Chapter 493, Statutes of 2008.  Expanded the  
          definition of an "on premise" display to include those displays  








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          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.  


          AB 1117 (Benoit) of 2007, would have deemed an advertising  
          display erected by a city or county to advertise businesses  
          operating within a redevelopment agency project area, or within  
          a business improvement district whose boundaries partly or  
          wholly overlap those of the redevelopment agency project area,  
          to be on the premises at any location within 1,000 feet of the    
               legal boundaries of the redevelopment agency's project area  
          if the display meets certain conditions. (Died - Never heard in  
          Senate Local Government Committee)   


          SB 563 (Ridley-Thomas) of 2007, would have deleted the  
          "rebuttable presumption" in current law that deems those  
          advertising displays that were unlawfully erected as lawful if  
          the sign owner had not received notice that the display was  
          unlawful within five years of the display being erected.  This  
          bill also would have deleted the requirement that entities  
          requiring the removal of unlawfully erected signs pay sign  
          owners just compensation to do so.  (Died in Senate Rules  
          Committee)


          AB 1499 (Benoit) of 2006, would have created an exemption to the  
          Act, to permit the City of Riverside to erect an outdoor  
          advertising display along Highway 91 to promote economic  
          activity for the Riverside Plaza.  (Vetoed by Governor)


          AB 801 (Jones) of 2006, would have created an exemption from the  
          OAA for one sign in the County of Sacramento.  (Vetoed by  
          Governor)


          AB 2441 (Klehs) of 2006, would have authorized an advertising  
          display in the redevelopment zone of the City of San Leandro  
          subject to specified conditions.  (Vetoed by Governor)









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          AB 1518 (J. Horton) of 2006, would have exempted, from the  
          prohibition against placing advertising displays adjacent to  
          landscaped freeways, any billboard located on property owned by  
          the Lennox School District, subject to certain conditions. (Died  
          pending concurrence in the Assembly)


          AB 762 (Nez), Chapter 725, Statutes of 2003.  Created an  
          exemption to the OAA by allowing the National Latino Arts  
          Council to place an advertisement on the roof of a  
          not-for-profit educational academy.


          SB 190 (Perata), Chapter 54, Statutes 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 Complex.




          Analysis Prepared by:                                             
                          Eric Johnson / G.O. / (916) 319-2531  FN:   
          0004905