Amended in Senate April 21, 2016

Senate BillNo. 1397


Introduced by Senator Huff

February 19, 2016


An act to add Article 4.6 (commencing with Section 172) to Chapter 1 of Division 1 of the Streets and Highways Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SB 1397, as amended, Huff. Highway safety and information program.

Existing law, the Outdoor Advertising Act, provides for the regulation by the Department of Transportation of advertising displays, as defined, within view of public highways.

This bill would enact the Highway Safety and Information Act. The bill would authorize the department, subject to federal approval, to enter into an agreement pursuant to a best value procurement and competitive process for a project with a contractor to construct, upgrade or reconstruct, and operate a network of changeable message signs within the rights-of-way of the state highwaybegin delete system,end deletebegin insert system that would include a demonstration phase of the project as a condition precedent to the full implementation of the agreement,end insert as specified. The bill would require the person with whom the department has entered into the agreement to contract and receive funds for the placement of advertisements, meeting certain standards established by the department, on the changeable message signs when they are not being used by the department. The bill would require revenues derived from the project to be allocated between the department and the person with whom the department has entered into the agreement and would require those revenues received by the department to be deposited in the State Highway Account, subject to appropriation by the Legislature. The bill would authorize the department to adopt guidelines and procedures relative to advertising on changeable message signs. The bill would require the department to submit a specified report to the fiscal and policy committees of the Legislature having jurisdiction over transportation matters.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Article 4.6 (commencing with Section 172) is
2added to Chapter 1 of Division 1 of the Streets and Highways
3Code
, to read:

4 

5Article 4.6.  Highway Safety and Information Act
6

 

7

172.  

This article shall be known, and may be cited, as the
8Highway Safety and Information Act.

9

172.2.  

The Legislature finds and declares all of the following:

10(a) Pursuant to Chapter 27 of the Statutes of 2014, the
11department has conducted a feasibility study and revenue analysis
12on the use of advertising on changeable message signs on the state
13highway system and determined the feasibility of implementing a
14project and potential revenue benefits.

15(b) The department’s current network of changeable message
16signs has proven to be an effective way to inform road users of
17critical safety and transportation-related conditions and of other
18important information and to protect the safe and efficient
19utilization of the highways.

20(c) Changeable message signs have played a critical role in the
21success of California’s Emergency Alert System, initiated by
22Chapter 517 of the Statutes of 2002. The current network of
23changeable message signs operated by the department, in
24coordination with the Department of the California Highway Patrol
25(CHP) and the Office of Traffic Safety, has helped keep our
26children and families safer by bringing public resources and private
27citizens together to help save lives during emergencies.

P3    1(d) Communicating timely information regarding laws, services,
2and events, public service and public health and safety messages,
3and emergency notifications is an essential public purpose that
4advances the general health, welfare, and safety of the citizens of
5California and persons who visit and travel through the state.

6(e) California makes available on its Internet Web site
7information regarding laws, services, and events, communicates
8public service and public health and safety messages, and transmits
9emergency notifications to users of computers, smartphones, and
10similar online and wireless devices.

11(f) Recent advances in technology have made it possible to
12create a more reliable, effective, and comprehensive network of
13changeable message signs that combine text with graphics in order
14to rapidly and clearly communicate important information to the
15users of California’s highways more safely and effectively than
16the current network of changeable message signs. This advanced
17technology would increase the efficacy and reliability of the
18network of changeable message signs, thereby enhancing the safety
19and travel experience of the people of California and would
20function as an extension and improvement of the existing California
21public information and emergency messaging communication
22efforts.

23(g) Revenues to the state generated by an upgraded changeable
24message sign network would provide additional funding for
25transportation and safety initiatives, such as additional highway
26maintenance and repair, in return for the right to place
27advertisements on the changeable message signs in a manner that
28is consistent with, and supports, the network’s safety and public
29communication functions.

30(h) The network of upgraded changeable message signs shall
31be located and upgraded in accordance with department guidelines
32for orientation toward motorists on the traveled way and shall have
33minimal impact outside of those rights-of-way.

34(i) The authority to use changeable message signs for
35commercial advertising shall require that the advertising and
36department messaging, when displayed in combination, are
37determined to be safe and do not create an unsafe distraction to
38 motorists, and is subject to prior authorization under federal law.

39

172.4.  

For purposes of this article, the following terms mean
40the following:

P4    1(a) “Agreement” means a legally enforceable agreement for the
2project to install and operate changeable message signs or the
3network of changeable message signs, including, but not limited
4to, a license, lease, highway improvement agreement, easement,
5encroachment permit, or operation and maintenance agreement.

6(b) “Best value” means a value determined by objective criteria
7that may include, but are not limited to, revenues to the state,
8features, experience, functions, life cycle costs, price, the capability
9to develop and incorporate advanced sign technologies, and other
10criteria deemed appropriate by the department.

11(c) “Changeable message sign” means a department-owned or
12controlled sign or official sign that is designed to display various
13messages that provide information to the public, such as traffic
14information or advertising, by mechanical or electronic means
15centrally controlled through a network, including, but not limited
16to, digital and light emitting diode (LED) technologies.

17(d) “Demonstration phase” means the initial phase of the project
18whereby the safety and operational and fiscal viability of placement
19of advertising on changeable message signs in exchange for
20revenue to the state and an upgraded changeable message sign
21network are demonstrated.

22(e) “Network” means the integrated network of enhanced
23changeable message signs. The network shall include upgraded
24changeable message signs at existing locations and new changeable
25message signs at additional locations as determined by the
26department.

27(f) “Person” means an individual, partnership, limited
28partnership, trust, estate, association, corporation, limited liability
29company, or other entity.

30(g) “Project” means to study, plan, design, construct, reconstruct,
31develop, finance, maintain, rebuild, improve, repair, lease, operate,
32or any combination of these, a state-of-the-art, full-color network
33of changeable message signs within the rights-of-way of the state
34highway system, or within the right-of-way of a major arterial that
35is included within an integrated corridor management system.

36

172.6.  

(a) Notwithstanding any other law, and subject to
37federal approval authorizing the department to do so, the
38department may enter into an agreement with one person to conduct
39a single project, which shall include a demonstration phase, in a
40manner that best effectuates the purposes of this article.begin insert If the
P5    1department is advised by the United States Department of
2Transportation, or any of its agencies, that a display of advertising
3authorized by this article would result in the reduction of federal
4aid highway funds to the state pursuant to Section 131 of Title 23
5of the United States Code, that display of advertising shall not be
6made.end insert
The department shall conduct a best value procurement and
7negotiate an initial agreement to become effective upon obtaining
8any necessary federal authorization. The department may provide
9services for which it is reimbursed with respect to preliminary
10design, inspection, and oversight of the project.

11(b) The agreement described in subdivision (a) shall do all of
12the following:

13(1) Provide for the construction, upgrade or reconstruction, and
14operation of changeable message signs selected for the project.
15The department shall be responsible for the maintenance of the
16selected changeable message signs.

17(2) Provide for complete reversion of any ownership interest in
18any of the privately constructed, upgraded or reconstructed, and
19operated changeable message signs to the department at the
20expiration of the agreement at no charge to the department and
21free and clear of any liens or encumbrances.

22(3) Provide that all department emergency notifications shall
23have priority over other messaging, including advertising.

24(4) Provide that the department, in consultation with the
25Department of the California Highway Patrol, shall retain the
26ability to make a determination on the safety of the changeable
27message signs, and may take those actions deemed necessary to
28protect public safety.

29(5) Require the person with whom the agreement is made to
30indemnify, defend, and hold harmless the department for any
31damage, injury claim, or incident in connection with the
32construction, upgrade or reconstruction, or operation of changeable
33message signs performed by or under the control and supervision
34of that person, or the advertising on changeable message signs,
35excluding any advertising approved in advance or provided by the
36department, including, but not limited to, personal injury, wrongful
37death, defamation, and property damage.

38(6) Provide that the department shall conduct a demonstration
39phase of the project as a condition precedent to the full
40implementation of the agreement described in this section. The
P6    1demonstration phase shall involve the construction, upgrade or
2 reconstruction, and operation of changeable message signs at
3current and planned locationsbegin delete equal to not less than 15 percent of
4the number of existing and planned changeable message signsend delete
at
5begin insert theend insert initiation of the project and shall be conducted on routes and
6highway corridors at sign locations selected by the department.
7begin insert The department shall determine the number of changeable message
8signs needed to be included in the demonstration, which number
9shall be sufficiently substantive to evaluate the impacts and the
10return on investment of the demonstration.end insert
The demonstration
11phase shall begin immediately following federal approval as
12provided in subdivision (a), and shall last until full implementation
13is authorized, and if full implementation is not authorized, then
14 for a period of time sufficient to allow the person contracting with
15the department to recover its capital and related costs for the
16project.

17(7) (A) Provide that the department shall retain an independent
18consultant to perform an evaluation of the results of the
19demonstration phase.

20(B) The department shall review the results of the demonstration
21phase and the evaluation from the independent consultant and
22determine, in its discretion, whether the placement of commercial
23advertising with all department messaging creates an unsafe
24distraction to motorists, and shall consider any other issues of
25concern that are identified in the demonstration phase.

26(C) The department may require changes to the agreement to
27address identified issues of concern and to allow for full
28implementation of the agreement. If, prior to full implementation,
29the agreement is amended or otherwise modified in a way that
30materially impacts a changeable message sign’s ability to generate
31revenues, the person conducting the project shall be entitled to
32recover from the department any unreimbursed capital or operating
33expenses.

34(8) Provide for the person with whom the agreement is made
35to contract and receive funds for the placement of commercial
36advertisements on changeable message signs, except during times
37and to the extent the signs are in use by the department, and to
38share revenues generated in connection with the use of those signs
39for commercial advertising in furtherance of the public interest.

P7    1(c) The network of changeable message signs shall be deemed
2to be part of the state highway system for purposes of identification
3and enforcement of traffic laws or for other official purposes, and
4the purposes of Division 3.6 (commencing with Section 810) of
5Title 1 of the Government Code.

6(d) Revenues from changeable message signs shall be allocated
7between the person with whom the agreement is made and the
8department in accordance with the agreement as provided in
9paragraph (8) of subdivision (b). Revenues derived from the project
10and received by the department, and any other revenue generated
11from advertising on changeable message signs owned by the
12department and received by the department, shall be deposited in
13the State Highway Account in the State Transportation Fund. This
14revenue shall not be subject to the transfer under Section 183.1 or
15any successor to that section. Revenues deposited under this section
16shall be retained in the State Highway Account, subject to
17appropriation by the Legislature, consistent with the provisions of
18any federal authorization.

19(e) The changeable message signs shall meet the design,
20construction, and operating requirements in the department’s
21standards and guidelines, including, but not limited to, controls,
22such as state-of-the-art sensors that control the brightness of the
23display based on the surrounding ambient light levels and other
24technologies muting adjacent glare, that focus the zone of vision
25toward motorists on the traveled way and prevent neighborhood
26impacts in the vicinity of the changeable message signs.

27(f) The department shall retain the ultimate right to determine
28whether the location of an existing changeable message sign or
29proposed location for the placement of a new changeable message
30sign has or will negatively impact a residential area or community.
31If the department determines that the location of a changeable
32message sign has or will have a negative impact on a residential
33area or community, the department may, in its discretion, impose
34additional requirements on its lighting or placement, require a
35different placement, not allow its placement, or require its removal.

begin insert

36
(g) Advertising on changeable message signs shall not be
37permitted on officially designated scenic highways.

end insert
38

172.8.  

Advertising on changeable message signs shall be in
39the form and under those conditions as may be determined by the
40department and as may be set forth in standards, guidelines, and
P8    1procedures adopted by the department. The advertising shall not
2compromise safety or the department’s safety communication
3functions. The upgraded network shall enhance public messaging,
4including, but not limited to, safety campaigns, emergency
5notifications, travel times, and traveler information and the function
6of the network of changeable message signs. All changeable
7message signs subject to this article shall be exempt from Section
85408 of the Business and Professions Code and from any and all
9regulations promulgated in connection with Section 5408 of the
10Business and Professions Code.

11

173.  

The department shall not enter into an agreement with
12any person who would cause or permit any changeable message
13sign to display or advertise alcohol, tobacco, firearms, sexually
14explicit material, or any illegal activity. The department shall adopt
15policies and guidelines in connection with the content and
16formatting of the advertising.

17

173.2.  

The department may use the changeable message signs
18for emergency messages, as needed, and shall have dedicated time
19to use the changeable message signs for traveler information and
20motorist safety and awareness campaigns and any other public
21service messaging desired by the state, without providing
22compensation to the person with whom it enters into an agreement
23pursuant to this article.

24

173.4.  

(a) When choosing the person with whom to enter into
25an agreement pursuant to Section 172.6 to effectuate the purposes
26of this article, the department shall select, pursuant to a competitive
27process, the person that the department determines will provide
28the best value.

29(b) The department may retain a consultant or adviser to assist
30in preparing the best value criteria, selection of the person, and
31oversight of the project. The consultant or adviser shall not bid on
32the project or, before one year following award of a contract, work
33as an officer or employee of, or consultant or adviser to, any person
34or persons seeking to bid on the project.

35

173.6.  

No later than two years after the implementation of the
36project, the department shall submit a report to the fiscal and policy
37committees of the Legislature with jurisdiction over transportation
38matters. The report shall include, but not be limited to, all of the
39following:

P9    1(a) The status of implementation of the agreement, including
2the number of signs placed and the locations of the signs placed.

3(b) The amount of revenue received, cost savings to the
4department, and the costs incurred by the department with respect
5to the project, including costs incurred prior to the time the
6department entered into an agreement.

7(c) An assessment of the effect the project has had on public
8safety, emergency notification, traveler information, and motorist
9safety and awareness campaigns.

10(d) A description of the types of advertising content displayed
11on the signs.

12

173.8.  

The provisions of this article are severable. If any
13provision of this article or its application is held invalid, that
14invalidity shall not affect other provisions or applications that can
15be given effect without the invalid provision or application.



O

    98