BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1199  


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          Date of Hearing:  August 10, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1199  
          (Hall) - As Amended April 26, 2016


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          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.









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          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  








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            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  








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            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