BILL ANALYSIS Ó
SB 1199
Page 1
Date of Hearing: June 22, 2016
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
SB
1199 (Hall) - As Amended April 26, 2016
SENATE VOTE: 27-7
SUBJECT: Advertising displays: City of Inglewood
SUMMARY: This bill authorizes two existing advertising displays
in the City of Inglewood to be considered "on-premise" displays
until January 1, 2023. Specifically, this bill:
1) Requires the signs in question to meet the following
conditions to be considered an on-premise display:
a) The advertising display is located within the
boundary limits of the City of Inglewood.
b) The advertising display was constructed on or before
January 1, 2012.
c) The advertising display is adjacent to Interstate
405 and located at either post mile 22.36L or 22.38L
north of Century Boulevard.
d) The advertising display does not cause the reduction
of federal aid highway funds provided pursuant to Section
131 of Title 23 of the United States Code.
1) Expands existing exemptions for billboards contained
within former RDAs to include advertising displays located
within the boundary limits of the City of Inglewood at two
SB 1199
Page 2
locations on Interstate 405 that were constructed on or
before January 1, 2012, so long as the advertising displays
do not cause the reduction of federal aid highway funds.
3) Makes findings and declarations to the need for the
special statute for the City of Inglewood.
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 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) Provides 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
SB 1199
Page 3
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 Redevelopment Agency (RDA)
project area boundaries, as those boundaries existed
on December 29, 2011;
b) Is located within the boundary limits of the
project;
c) Was constructed before January 1, 2012; and
d) 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 the Department of Transportation (Caltrans) an
extension beyond January 1, 2023, not to exceed the
expiration of the redevelopment project area.
FISCAL EFFECT: Unknown
COMMENTS:
Purpose of the bill : According to the author: "In 2011, the
Governor signed AB 26X1 which eliminated redevelopment agencies
and established successor agencies to take control of all assets
and property. These successor agencies, typically the city or
county that originally established the agency are now
SB 1199
Page 4
responsible for administering remaining debt obligations and
other assets including advertising displays located in a former
redevelopment zone.
Advertising displays located in former redevelopment agency
zones provide a number of benefits to local businesses and local
governments. Not only do these displays encourage economic
investment in the area, they also provide general fund revenue
for the local government successor agency.
Because redevelopment agencies and their boundaries no longer
exist and successor agencies are tasked with managing their
assets and property, this bill ensures that the City of
Inglewood is able to fully utilize their outdoor advertising
displays to promote business located within the City."
Background : 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
SB 1199
Page 5
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 signs were constructed
through this authority.
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.
The 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 the HBA by
reducing all federal highway transportation funds to the state
by 10%.
This bill expands the RDA exemption for two advertising displays
located within the boundary limits of the City of Inglewood at
two locations on Interstate 405. The expansion could conflict
with regulations that are adopted pursuant to the HBA, 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
SB 1199
Page 6
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. SB 1199 does contain a provision attempting to mitigate the
risk of losing federal funds by stipulating the signs may remain
in place as long as they do not result in the reduction of
federal aid highway funds.
Outdoor Advertising Act : The state OAA regulates the placement
of advertising displays (billboards) and signs along interstate
or primary highways, landscaped freeways and similar specified
highways. The OAA, along with related federal provisions, is
intended, among other things, to promote highway beautification
and provide a consistent framework for the regulation of
advertising displays along freeways and highways. The OAA sets
standards for the advertising structures, including their size,
identification and location, and requires compliance with permit
application procedures and conditions administered by Caltrans.
The OAA sets minimum spacing requirements between billboards on
interstate highways or primary highways, which are freeways and
minimum distances from interchanges or an intersection
at grade. The OAA also sets minimum distances between signs on
traditional (primary) highways within and without incorporated
areas.
The OAA specifies the original and renewal permit fees for
billboards, as well penalties for permit violations. Other
provisions provide for substantial monetary penalties for the
unlawful trimming, destruction, or removal of trees or shrubs to
enhance the visibility of highway-adjacent billboards.
Pending Action on Signs In Question : 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
SB 1199
Page 7
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 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. To date, Caltrans has not filed such an injunction
with the courts.
Support : The City of Inglewood writes in support: "The City of
Inglewood, like many if the other 400-plus cities in the State
of California, had been a major beneficiary of local
redevelopment efforts by its redevelopment agency?However, in
2011, when Governor Brown signed and AB 26X1 was enacted, and
redevelopment agencies were eliminated, the revenues generated
by redevelopment efforts were greatly reduced and eliminated in
certain areas. This bill will not cause any disruption or
reduction of federal highway funds to California, nor expand the
authority previously granted to cities by SB 684 (Hill, 2004),
the City of Inglewood urges you to vote "AYE" on SB 1199."
Opposition : The California State Outdoor Advertising Association
(CSOAA) writes in opposition: "The regulatory structure that
governs our member businesses is complex, and must consider
federal, state and local considerations. We are concerned that
this proposal creates an unlevel playing field for those outdoor
SB 1199
Page 8
companies that maintained lawfully permitted displays. SB 1199
would benefit those that have not complied with existing law,
while punishing other businesses that have abided by the
statute. Passing this bill is putting $350 million of federal
funds at risk in order to facilitate two wallscapes. This is
certainly not wise public policy. At very least, there is no
reason to take the risk while legal proceedings have not been
finalized. For these reasons, we must oppose SB 1199."
Double referral : Should SB 1199 pass the Assembly Committee on
Governmental Organization on Wednesday, June 22, 2016, this bill
will be referred to the Assembly Committee on Local Government
for further consideration.
Prior/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.
SB 31 (Padilla), 2013-2014 Legislative Session. Recasts the
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. (Pending on the Assembly Floor)
SB 694 (Correa), 2013-2014 Legislative Session. Exempts from
the Outdoor Advertising Act (OAA) advertising displays at
current or future high-speed rail stations. (Pending in Assembly
Appropriations Committee)
AB 26X (Blumenfield), Chapter 5, Statutes of 2011-12 First
Extraordinary Session. Among other provisions, this bill
eliminated redevelopment agencies.
AB 2339 (Solorio), Chapter 493, Statutes of 2008. This bill
expanded the definition of an "on premise" display to include
those displays 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.
SB 1199
Page 9
AB 1499 (Benoit) of 2005-2006 Legislative Session. Creates 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 2005-2006 Legislative Session. Creates an
exemption from the Outdoor Advertising Act for one sign in the
County of Sacramento. (Vetoed by Governor)
AB 2441 (Klehs) of 2005-2006 Legislative Session. Authorizes an
advertising display in the redevelopment zone of the City of San
Leandro subject to specified conditions. (Vetoed by Governor)
AB 1518 (J. Horton) of 2005-2006 Legislative Session. Exempts,
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 Assembly)
AB 762 (Nunez), Chapter 725, Statutes of 2003, creates an
exemption to the Act by allowing the National Latino Arts
Council to place an advertisement on the roof of a
not-for-profit educational academy.
SB 1480 (Speier), Chapter 972, Statutes of 2002, requires the
applicant for a state billboard permit to have the written
consent of the city or county with land use jurisdiction as well
as the owner of the property site for the billboard
SB 190 (Perata) Chapter 54, Statutes of 2001. Exempted a
certain development of highway advertising in Oakland from
existing laws protecting landscaped highways permitted the City
of Artesia to erect an advertising display alongside a
landscaped highway. Permitted the City of Artesia to lease one
billboard space adjacent to the 91 Freeway on city property.
REGISTERED SUPPORT / OPPOSITION:
Support
SB 1199
Page 10
City of Azusa
City of Inglewood
Opposition
California State Outdoor Advertising Association
Analysis Prepared by:Kenton Stanhope / G.O. / (916)
319-2531