Amended in Senate May 31, 2016

Amended in Senate April 21, 2016

Senate Bill No. 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 begin insert competitive end insert procurement begin delete and competitive end delete process for a project with begin delete a contractor end delete begin insert an entity end insert to construct, upgrade or reconstruct, and operate a network of changeable message signs within the rights-of-way of the state highway system that would include a demonstration phase of the project as a condition precedent to the full implementation of the agreement, as specified. The bill would require the begin delete person end delete begin insert entity end insert 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 begin delete person end delete begin insert entity end insert 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:

SECTION 1.  

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

 

Article 4.6.  Highway Safety and Information Act

 

172.  

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

172.2.  

The Legislature finds and declares all of the following:

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

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

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

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

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

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

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

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

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

172.4.  

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

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

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

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

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

begin insert

(e) “Entity” means an individual, partnership, limited
partnership, trust, estate, association, corporation, limited liability
company, or other entity.

end insert begin delete

(e)

end delete

begin insert (f) end insert  “Network” means the integrated network of enhanced
changeable message signs. The network shall include upgraded
changeable message signs at existing locations and new changeable
message signs at additional locations as determined by the
department.

begin delete

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

end delete

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

172.6.  

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

begin insert

(2) A proposal submitted to the department in response to the
best value competitive procurement shall be accompanied by a
certified check in an amount determined by the department and
specified in the request for proposals to cover the reasonable costs
of preparation of the best value procurement materials, the review
and evaluation of the proposal, and the negotiation of an
agreement with the selected entity. The department shall promptly
return the certified checks accompanying proposals not accepted
for consideration by the department.

end insert begin insert

(3) The agreement shall provide that the entity with whom the
agreement is entered will bear all reasonable costs of the project,
including, but not limited to, costs of installation, maintenance,
and operation of the project, and that reasonable costs incurred
to procure the agreement and not covered by the certified check
required under paragraph (2) shall be reimbursed to the
department.

end insert

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

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

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

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

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

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

(6) Provide that the department shall conduct a demonstration
phase of the project as a condition precedent to the full
implementation of the agreement described in this section. The
demonstration phase shall involve the construction, upgrade or
reconstruction, and operation of changeable message signs at
current and planned locations at the initiation of the project and
shall be conducted on routes and highway corridors at sign
locations selected by the department. The department shall
determine the number of changeable message signs needed to be
included in the demonstration, which number shall be sufficiently
substantive to evaluate the impacts and the return on investment
of the demonstration. The demonstration phase shall begin
immediately following federal approval as provided in subdivision
(a), and shall last until full implementation is authorized, and if
full implementation is not authorized, then for a period of time
sufficient to allow the begin delete person end delete begin insert entity end insert contracting with the department
to recover its capital and related costs for the project.

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

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

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

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

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

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

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

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

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

172.8.  

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

173.  

The department shall not enter into an agreement with
any begin delete person end delete begin insert entity end insert who would cause or permit any changeable
message sign to display or advertise alcohol, tobacco, firearms,
sexually explicit material, begin insert political messages or advertisements, end insert
or any illegal activity. The department shall adopt policies and
guidelines in connection with the content and formatting of the
advertising.

173.2.  

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

173.4.  

(a) When choosing the begin delete person end delete begin insert entity end insert with whom to enter
into an agreement pursuant to Section 172.6 to effectuate the
purposes of this article, the department shall select, pursuant to a
competitive process, the begin delete person end delete begin insert entity end insert that the department
determines will provide the best value.

(b) The department may retain a consultant or adviser to assist
in preparing the best value criteria, selection of the begin delete person, end delete begin insert entity, end insert
and oversight of the project. The consultant or adviser shall not
bid on the project or, before one year following award of a contract,
work as an officer or employee of, or consultant or adviser to, any
begin delete person or persons end delete begin insert entity or entities end insert seeking to bid on the project.

173.6.  

begin delete No later than two years after the end delete begin insert Promptly following the
department’s review of the consultant’s evaluation of the
demonstration phase of the project, and before authorizing full end insert
implementation of the project, the department shall submit a report
to the fiscal and policy committees of the Legislature with
jurisdiction over transportation matters. The report shall begin insert include
the consultant’s report and any recommended department revisions
to the project, and shall also end insert include, but not be limited to, all of
the following:

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

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

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

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

173.8.  

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