BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 1199 Hearing Date: 4/19/2016
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|Author: |Hall |
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|Version: |3/29/2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Alison Dinmore |
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SUBJECT: Advertising displays: redevelopment agency project
areas
DIGEST: This bill provides that a billboard advertising for
businesses and activities within a city, county, or city and
county that is contained within an existing redevelopment agency
(RDA) project may remain and be considered an on-premises
display until January 1, 2023, if the display meets specified
criteria.
ANALYSIS:
Existing law:
1)Establishes the Outdoor Advertising Act (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
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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 an existing advertising display to be considered
on-premise if the display:
a) Advertises those businesses and activities developed
within the former
b) RDA project area boundaries, as those boundaries existed
on December 29, 2011;
c) Is located within the boundary limits of the project;
d) Was constructed before January 1, 2012; and
e) Does not cause the reduction in federal aid highway
funds.
6)Authorizes, on and after January 1, 2022, the applicable city,
county, or city and county to request, for good cause, from
Caltrans an extension beyond January 1, 2023, not to exceed
the expiration of the redevelopment project area.
This bill expands existing exemptions for billboards contained
within former RDAs to include the advertising of businesses or
activities operating outside the redevelopment project, but
within the boundaries of the city, county, or city and county
that contained the redevelopment project.
COMMENTS:
1)Purpose. According to the author, "[i]n 2011, the Governor
signed AB 26X1 which eliminated RDAs and established successor
agencies to take control of all assets and property. Those
successor agencies, typically the city or county that
originally established the agency, are now responsible for
administering remaining debt obligations and other assets
including advertising displays located in a former
redevelopment zone. Because RDAs and their boundaries no
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longer exist and successor agencies are tasked with managing
their assets and property, this bill ensures that local
governments are able to fully utilize their outdoor
advertising display to promote business in their
jurisdiction."
2)California already provides an exception for RDA displays in a
post-RDA world. In 2013, the legislature passed and the
Governor signed SB 684 (Hill, Chapter 544, Statutes of 2013),
which sought to address the question about billboards that
advertise businesses in RDA project areas in the era of
successor agencies. That bill permitted existing advertising
displays that advertised businesses and activities within the
boundary limits of a RDA project to remain and be considered
"on-premise displays" (e.g., not subject to the OAA) until
January 1, 2023. The city or county could then apply to
Caltrans for an extension, showing "good cause" beginning on
January 1, 2022.
Generally speaking, local governments established RDA project
areas in blighted areas that require additional investment to
address the blight. Until RDAs were dissolved, existing law
allowed RDAs to permit advertising signs for 10 years, after
which they were regulated by Caltrans and the OAA, unless the
RDA and Caltrans agreed to an extension for good cause.
Legislation created the RDA exemption to the OAA to allow
businesses in these less-desirable places to advertise for two
reasons. First, travelers who may have been reluctant to
frequent businesses in the area because of the perceived
blight would consider doing so as redevelopment investment
helped address the blight issues. Second, the new advertising
opportunity could be an additional tool to help struggling
businesses in the project area become more successful.
The dissolution of RDAs raised questions about how existing
signs would be treated by Caltrans because there is no longer
an RDA to negotiate the extension with Caltrans. SB 684
permitted these existing displays to remain in place for a
designated period of time and modeled the OAA exception for
RDA signs. The thought was that at some point, either the
blighted area has improved to the point that the businesses no
longer need the unique competitive advantage provided by the
sign, or the problems are too large for the signs to resolve.
Additionally, in the interim, these signs provided needed
funding to cities that were losing large amounts of money from
RDAs. At the time, Caltrans estimated that 95 advertising
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signs were constructed through this authority.
3)Federal highway funds imperiled. As noted above, current law
permits existing signs within an RDA project area that
advertise for businesses within RDA to remain in place until
2023. This bill would expand that exemption and permit any
billboard that was constructed before the end of 2011 to
remain, if it is in any local agency that had an RDA and the
display is within the boundaries of the local agency that had
an RDA, until 2023. The author has not been able to
articulate how many additional signs this would permit to
remain in place or how many local agencies would be affected,
but the Department of Finance's website indicates that the
state dissolved over 400 RDAs in 2011. It is clear that the
impacts of this exception could have broad-reaching impacts.
Additionally, the expansion of this exception would conflict
with regulations that are adopted pursuant to the federal
Highway Beautification Act, and would place California at risk
to lose up to 10% of its federal funds. Presently, California
receives $3.5 billion from the federal government, and stands
to lose up to $350 million. Current law states that if an
advertising display will result in the loss of federal aid
highway funds, the display owner or operator shall remove the
display and be subject to a civil fine of $10,000 per day.
4)Impacts on the subjects of a recent legal decision. This bill
impacts the subjects of a recent decision by an administrative
law court concerning violations of the OAA. On November 20,
2015, an administrative law judge (ALJ) found that cause
existed for Caltrans to issue Notices of Violation, requiring
correction of violations and payment of statutory penalties,
pursuant to the OAA and related Caltrans regulations,
concerning two "large-scale super graphic wall signs"
displayed by Sky Posters in Inglewood, California. One
display, measuring 25,000 square feet, depicted displays for
movies such as X-Men and Ant Man, while the other, measuring
30,000 square feet, displayed an image of the Nissan Rogue.
Both are affixed to the side of a 12-story building adjacent
to a section of Interstate 405. By comparison, the OAA
restricts permitted advertising to displays of 1,200 square
feet in area with a maximum height of 25 feet and a maximum
length of 60 feet.
In or about August 2010, Sky Posters applied for and obtained
approval from Caltrans for placing RDA displays on the
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building. In April 2014, however, Caltrans issued two
violation notices based on the conclusion that the subject
displays were not redevelopment displays advertising
businesses in the City's redevelopment zone and Sky Posters
had only received approval for the placement of RDA displays.
Additionally, these wall signs were found along a landscaped
highway.
After the Notice of Violation was issued, Sky Posters filed a
Notice of Defense, which requested an administrative hearing.
As noted above, the administrative law judge found Sky Posters
to be in violation of the OAA, and pursuant to the OAA,
ordered Sky Posters to pay $10,300 in penalties and $1,405,641
as disgorgement of the gross revenue that resulted from the
displays. The ALJ opinion states that the OAA does not
provide for injunctive relief. For this reason, if Caltrans
wants to require Sky Posters to remove the wall signs,
Caltrans will have to seek such relief from a Superior Court
of the State of California.
As of Monday April 11, the two "large-scale super graphic wall
signs" were still up. If this bill were passed, Sky Posters
would likely be permitted to continue displaying the two wall
posters at issue.
Given the broad implications of this bill, the committee may
wish to consider whether the legislature should be carving out
exceptions to the OAA in fairness to others that operate
advertising displays legally.
Related Legislation:
SB 684 (Hill, Chapter 544, Statutes of 2013) - permitted
existing advertising displays that advertised businesses and
activities within the boundary limits of an RDA project to
remain and be considered "on-premise displays" until January 1,
2023. The city or county could then apply to Caltrans for an
extension, showing "good cause" beginning on January 1, 2022.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: Yes
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POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 13, 2016.)
SUPPORT:
None received
OPPOSITION:
None received
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