BILL ANALYSIS Ó
SB 1199
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
SB
1199 (Hall) - As Amended April 26, 2016
SENATE VOTE: 27-7
SUBJECT: Advertising displays: City of Inglewood.
SUMMARY: 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; and,
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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 redevelopment agencies (RDAs) to include advertising
displays located within the boundary limits of the City of
Inglewood at two 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.
2)Finds and declares that a general statute cannot be made
applicable within the meaning of Section 16 of Article IV of
the California Constitution due to the unique circumstances
concerning the location of the advertising displays, or
proposed advertising displays, set forth in this act and the
need for advertising in that location, it is necessary that an
exemption from some of the provisions of the Outdoor
Advertising Act be provided for those displays.
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
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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 that 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 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.
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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:
COMMENTS:
1)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. SB 684 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" (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
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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
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%.
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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. 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
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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
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 ALJ 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
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such relief from a Superior Court of the State of California.
To date, Caltrans has not filed such an injunction with the
courts.
2)Bill Summary. 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 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.
This is an author-sponsored bill.
3)Author's Statement. 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 responsible for administering remaining debt obligations
and other assets including advertising displays located in a
former redevelopment zone.
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"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."
4)Arguments in Support. The City of Inglewood writes that the
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.
5)Arguments in Opposition. None on file.
6)Double-Referral. This bill was heard by the Governmental
Organization Committee on June 22, 2016, where it passed with
a 19-0 vote.
REGISTERED SUPPORT / OPPOSITION:
Support
Cities of Azusa and Inglewood
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Opposition
None on file.
Analysis Prepared by:Debbie Michel / L. GOV. / (916)
319-3958