BILL ANALYSIS Ó SB 1199 Page 1 Date of Hearing: August 10, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1199 (Hall) - As Amended April 26, 2016 ----------------------------------------------------------------- |Policy |Governmental Organization |Vote:|19 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Local Government | |9 - 0 | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill authorizes two existing advertising displays along Interstate 405 in the City of Inglewood to be considered "on-premise" displays, until January 1, 2023, and therefore exempt from the state Outdoor Advertising Act (OAA). This authorization is valid as long as it does not cause a reduction of federal transportation funds. SB 1199 Page 2 FISCAL EFFECT: Possible loss of up to $350 million in federal transportation funds as a result of a violation of provisions of the federal Highway Beautification Act (HBA) of 1965 (See Comment #5). COMMENTS: 1)The OAA. The state OAA regulates the placement of advertising displays 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. 2)Redevelopment Agencies (RDAs) and the OAA. 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 blighted areas to advertise as an additional tool to help struggling businesses in the project area become more successful. SB 684 (Hill), Chapter 544, Statutes of 2013, 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 SB 1199 Page 3 limits of an RDA project to remain 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. 3)Federal Highway Beautification Act of 1965: The 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%. 4)Purpose. SB 1199 expands the RDA exemption for two advertising displays located within the boundary limits of the City of Inglewood at two locations on Interstate 405. According to the author, SB 1199 will help ensure that the City of Inglewood is able to fully utilize their outdoor advertising displays to promote businesses located within the area. 5)Staff Comments. This bill, in its current form, poses unnecessary financial risk to the state of California. Expanding the two specified advertising displays in Inglewood may violate the HBA because of their size, content, and location. SB 1199 contains provisions designed to mitigate this risk, but these provisions may be inadequate. The bill currently allows this advertising exemption to remain in place insofar that it does not result in a reduction of federal aid SB 1199 Page 4 highway funds. However, the federal government may still withhold funds while the legal process of removing the advertisement unfolds. While it is unlikely that the federal government would withhold $350 million in funding over just two advertising displays, SB 1199 can be further strengthened to prevent such a scenario altogether. For instance, the bill could be amended to make the provisions of this bill contingent upon written confirmation from the Federal Highway Administration that the signs in question do not reduce federal funds. Analysis Prepared by:Luke Reidenbach / APPR. / (916) 319-2081