BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING


          AB  
          1373 (Santiago)


          As Amended  May 14, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                   |Noes               |
          |                |      |                       |                   |
          |                |      |                       |                   |
          |----------------+------+-----------------------+-------------------|
          |Governmental    |19-1  |Gray, Linder,          |Bigelow            |
          |Organization    |      |Achadjian, Alejo,      |                   |
          |                |      |Cooley, Cooper, Daly,  |                   |
          |                |      |                       |                   |
          |                |      |                       |                   |
          |                |      |Cristina Garcia,       |                   |
          |                |      |Eduardo Garcia,        |                   |
          |                |      |Gipson, Roger          |                   |
          |                |      |Hernández,             |                   |
          |                |      |Jones-Sawyer, Low,     |                   |
          |                |      |Mayes, Perea, Salas,   |                   |
          |                |      |Steinorth, Waldron,    |                   |
          |                |      |Wilk                   |                   |
          |                |      |                       |                   |
          |----------------+------+-----------------------+-------------------|
          |Appropriations  |16-1  |Gomez, Bloom, Bonta,   |Bigelow            |
          |                |      |Calderon, Chang, Daly, |                   |
          |                |      |Eggman, Gallagher,     |                   |
          |                |      |                       |                   |
          |                |      |                       |                   |
          |                |      |Eduardo Garcia,        |                   |








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          |                |      |Holden, Jones, Quirk,  |                   |
          |                |      |Rendon, Wagner, Weber, |                   |
          |                |      |Wood                   |                   |
          |                |      |                       |                   |
          |                |      |                       |                   |
           ------------------------------------------------------------------- 


          SUMMARY:  Provides an exemption from regulations of the Outdoor  
          Advertising Act (OAA) for signs allowed by a City of Los Angeles  
          ordinance in relation to the number and location of billboards in  
          an area bounded by Wilshire Boulevard on the northeast, South  
          Figueroa Street on the southeast, Interstate 10 on the southwest,  
          and State Route 110 on the northwest, subject to certain  
          conditions.  Specifically, this bill:  
          1)Exempts from specific provisions of the OAA, any advertising  
            display located in the geographic area in the City of Los  
            Angeles bounded by Wilshire Boulevard on the northeast, South  
            Figueroa Street on the southeast, Interstate 10 on the  
            southwest, and State Route 110 on the northwest, if all of the  
            following conditions are met:
             a)   The advertising display is authorized by, or in accordance  
               with, an ordinance, including, but not limited to, a specific  
               plan or sign district, adopted by the City of Los Angeles  
               that regulates advertising displays by identifying the  
               specific displays or establishing regulations that include,  
               at a minimum, all of the following:
               i)     Number of signs and total signage area allowed.
               ii)    Maximum individual signage area.


               iii)   Minimum sign separation.


               iv)    Illumination restrictions and regulations, including  
                 signage refresh rate, scrolling, and brightness.


               v)     Illuminated sign hours of operation.








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          2)Specifies that the owner of the advertising display has  
            submitted to the California Department of Transportation  
            (Caltrans) a copy of the ordinance adopted by the City of Los  
            Angeles authorizing the advertising display and identification  
            of the provisions of the ordinance required, as defined and the  
            department has certified that the ordinance meets designed  
            minimum requirements.
          3)Provides the advertising display will not advertise products,  
            goods, or services related to tobacco, firearms, or sexually  
            explicit material.


          4)Provides this bill would not limit the City of Los Angeles from  
            adopting ordinances prohibiting or further restricting the size,  
            number, or type of advertising displays permitted by this  
            legislation.


          5)Provides that if the advertising display is a message center,  
            the owner of the display shall do one of the following:


             a)   Makes the message center display available on a  
               space-available basis for use by Caltrans or the Department  
               of the California Highway Patrol for public service messages,  
               including Emergency Alert System (Amber Alert) messages, as  
               defined, and messages containing, among other things, reports  
               of commute times, drunk driving awareness messages, reports  
               of accidents of a serious nature, and emergency disaster  
               communications.
             b)   Makes a message center display not subject to the  
               provision that is under the control of the owner of the  
               advertising display available on a space-available basis for  
               public service messages in a location acceptable to Caltrans  
               and the Department of the California Highway Patrol.










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             c)   Provides funding to Caltrans for the installation of a  
               message center display to accommodate those public service  
               messages, which may include funding as part of mitigation in  
               connection with the approval of development of the property  
               on which the message center display is located by the City of  
               Los Angeles.


          6)Provides that if an advertising display is subject to a notice  
            from the United States Department of Transportation, Federal  
            Highway Administration, or other applicable federal agency to  
            the state that the operation of that display will result in the  
            reduction of federal funds, as provided, authorization of the  
            display would cease 60 days after the state notifies the display  
            owner of the receipt of the federal notice, and would require  
            the display owner to remove all advertising copy within that  
            time or be subject to specified civil fines.
          7)Makes the City of Los Angeles primarily responsible for ensuring  
            that a display remains in compliance with the ordinance and the  
            bill's requirements, and would require the city to indemnify and  
            hold Caltrans harmless if the city fails to do so.


          8)Makes findings and declarations as to the need for a special  
            statute relating to the City of Los Angeles.


          EXISTING LAW:  


          1)Establishes 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 be  








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            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)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 a single advertising structure exemption for each of  
            several cities, including an exemption for advertising on  
            "street furniture" in San Francisco, several billboards situated  
            on the grounds of the Oakland-Alameda County Coliseum complex,  
            and structures within the Mid-City Recovery Redevelopment  
            Project Area within Los Angeles.


          6)Requires Caltrans to assess penalties for a violation of the  
            OAA, as specified.  If an advertising display is placed or  
            maintained in a location that does not conform to the provisions  
            of this chapter or local ordinances, and is not removed within  
            30 days of written notice from the department or the city or the  
            county with land use jurisdiction over the property upon which  
            the advertising display is located, a penalty of $10,000 plus  
            $100 for each day the advertising display is placed or  
            maintained after the department sends written notice shall be  








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            assessed.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, likely initial Special Fund costs to the Caltrans of  
          less than $50,000 to review and revise existing regulations,  
          conduct any coordination activities, review ordinances, and  
          inspect new advertising displays and applications; likely ongoing  
          Special Fund costs of less than $25,000 to Caltrans to annually  
          inspect advertising displays and applications. 


          COMMENTS:  


          Purpose of the bill:  According to the author, this bill proposes  
          to allow for the use of revenue-generating advertising displays  
          within a small area of Downtown Los Angeles with the City of Los  
          Angeles consent.


          The author's office states, according to a recent report, the City  
          of Los Angeles has lost $5 billion in economic development over  
          the last four years alone due to a lack of hotel rooms and an  
          outdated Los Angeles Convention Center.  Studies have shown that  
          an additional 2,000 to 3,000 hotel rooms together with hotel  
          facilities such as meeting and banquet rooms are needed to fully  
          support the Convention Center.  


          According to the information provided by the author, the Los  
          Angeles' Metropolis Project (Project) is a 6.3-acre, $1 billion  
          development adjacent to LA Live that has taken nearly three  
          decades to come to fruition.  The development, which broke ground  
          in the summer of 2014, will be composed of four towers:  1) an  
          18-story boutique hotel - Hotel Indigo - set to open in October  
          2016; 2) a 38-story residential tower; 3) a 40-story residential  
          tower; and 4) a 52-story residential tower.









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          The Project is expected to bring $156.7 million in tax revenue  
          into the City of Los Angeles over the next 25 years, 20,000  
          construction jobs over the next four or five years, and 500  
          permanent jobs upon completion.  The project will also add 350  
          hotel rooms (with meeting and event facilities), substantial  
          restaurant and retail space, as well as 1,560 residential units to  
          the Convention Center area.  In addition, Anschutz Entertainment  
          Group  recently announced a 755-room expansion of its Marriott  
          Hotel located at LA Live between the Convention Center and the  
          Metropolis Project.


          The author states, this bill will spur the construction of needed  
          hotels in support of the Los Angeles City's Convention Center, the  
          Sports & Entertainment District, and the Project's link to the Los  
          Angeles City's financial district.  It also empowers the City of  
          Los Angeles to control its urban streetscape and interface with  
          the state highways bisecting its urban core.  With the completion  
          of the Project, the expansion and revitalization of the Convention  
          Center, and the addition of hotel rooms in the Sports and  
          Entertainment District, over the next several years, the area  
          covered by this bill will become a central tourist, convention,  
          sports, and entertainment destination for people from all over the  
          world. 


          The author points out, this bill only affects signage within the  
          few blocks east of Interstate 110, north of Interstate 10, south  
          of 8th Street, and west of Figueroa Street in the City of Los  
          Angeles.  These blocks are very different from other  
          freeway-facing areas in California in that they are highly  
          urbanized and contain a dense proliferation of convention,  
          entertainment, sports, and hotel uses.  This measure retains local  
          control by allowing the City of Los Angeles to determine the  
          amounts and types of safe signage to be placed at its gateway.  It  
          also allows the City of Los Angeles to require public benefits  
          that enhance traffic safety and aesthetics in the streets within  
          and surrounding the area. 








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          The author points out that this bill additionally requires any  
          corresponding ordinance within the City of Los Angeles to include  
          protections to prevent signage from becoming overly distracting,  
          misleading, or disruptive.  This corresponds with similar  
          limitations set forth in the OAA.   For large developments -  
          especially those that fall within the sports and entertainment  
          industries - the ability to generate revenue via the use of  
          near-freeway signage for off-site sponsors dramatically decreases  
          the overhead costs of construction projects to taxpayers.


          The author concludes that this bill is an important step towards  
          ensuring that current and future developments within the  
          revitalized Downtown Los Angeles area will be able to tap into  
          this increasingly critical financing source to backfill the  
          decrease in public funding available for such purposes.


          Background:


          OAA:  The OAA regulates the placement of advertising displays  
          (i.e., billboards) and signs along interstate or primary highways,  
          landscaped freeways and similar specified highways.  The OAA must  
          also generally conform to various federal laws, including the  
          Highway Beautification Act of 1965 (23 United States Code Section  
          131 et seq.).  


          The OAA sets standards for the structures, including their size,  
          identification and location, and requires compliance with  
          application procedures and conditions administered by Caltrans.   
          The OAA 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 be  
          viewed primarily by persons traveling on the main-traveled way of  
          the landscaped freeway.








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          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.


          While state and federal law generally regulates billboards and  
          similar advertising displays, local governments may also impose  
          restrictions equal to or greater than any restriction imposed by  
          state law, but local governments may not allow a display that is  
          in violation of state law.  Local governments are also entitled to  
          a portion of fees and fines under the state law, and they may also  
          require advertisers to obtain licenses and permits, in addition to  
          any licenses required by state law.  


          The OAA provides for general exemptions and specified exceptions  
          to the prohibition on advertising along 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.  In addition, since 1995, a number of bills have  
          created exemptions for specific cities, including an exemption for  
          advertising on "street furniture" in San Francisco, five signs  
          situated on the property of the Oakland-Alameda County Coliseum  
          complex, one sign each in the Cities of Costa Mesa and Richmond,  
          and four signs within the Mid-City Recovery Redevelopment Project  
          Area within Los Angeles.


          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.








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          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 HBA by reducing  
          all federal highway transportation funds by a designated  
          percentage.


          Policy issue:  This bill might authorize the placement of an  
          advertising sign that is non-conforming to both the specifics and  
          intent of the OAA.  It might extend further the precedent for  
          legislative approval of exemptions to OAA.  Exemptions for  
          nonconforming and prohibited billboards and lighted signs along  
          interstate or primary highways and landscaped freeways might  
          undermine and render meaningless the provisions and intent of the  
          OAA.


          Prior legislation: SB 31 (Padilla), Chapter 542, Statutes of 2013,  
          recasts an arena advertising exception to exempt from the OAA  
          specified advertising displays authorized before January 1, 2019,  
          by local ordinance, at a venue with a capacity of 15,000 seats or  
          more that is capable of providing a permanent venue for  
          professional sports.  In essence, SB 31 allows for local control  
          while establishing statewide guidelines for advertising displays  
          at professional sports facilities and arenas.


          SB 684 (Hill), Chapter 544, Statutes of 2013, amended the  
          redevelopment agency (RDA) exemption to OAA to reflect the  
          elimination of redevelopment agencies.  (Held in the Senate  
          Transportation Committee)










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          SB 694 (Correa), Chapter 545, Statutes of 2013, exempted, from the  
          OAA, advertising displays at a publicly owned multi-model transit  
          facility (MTF) that is to serve as a station for the high-speed  
          train system, as specified, and requires revenues from the  
          advertising display to be used to support the construction,  
          operation, and maintenance of the MTF.


          AB 2566 (Hill), of the 2011-12 Regular Session, would have  
          provided an exemption from the regulations of the OAA for an  
          advertising display located on State Route 1, in the County of San  
          Mateo, if certain conditions are satisfied.


          SB 402 (Vargas), of the 2011-12 Regular Session, would have  
          provided an exemption from the regulations of the OAA for an  
          advertising display located within 1,800 feet of the intersection  
          of State Highway Routes 8 and 111 in the County of Imperial if  
          certain conditions are satisfied.  (Senate Rules Committee)


          AB 2756 (Blumenfield), Chapter 615, Statutes of 2010, defines  
          "mobile billboard advertising display" and allows a local  
          authority to regulate these displays.


          AB 2339 (Solorio), Chapter 493, Statutes of 2008, expanded the  
          definition of an "on premise" display to include those displays  
          advertising products, goods, or services sold on the premises of  
          an arena of at least 5,000 seats and is located on public land,  
          provided certain conditions were met.  


          AB 1117 (Benoit) of the 2007-08 Regular Session, would have deemed  
          an advertising display erected by a city or county to advertise  
          businesses operating within a redevelopment agency project area,  
          or within a business improvement district whose boundaries partly  
          or wholly overlap those of the redevelopment agency project area,  
          to be on the premises at any location within 1,000 feet of the  








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          legal boundaries of the redevelopment agency's project area if the  
          display meets certain conditions. (Held in Senate Local Government  
          Committee)   


          SB 563 (Ridley-Thomas) of the 2007-08 Regular Session, would have  
          deleted the "rebuttable presumption" in current law that deems  
          those advertising displays that were unlawfully erected as lawful  
          if the sign owner had not received notice that the display was  
          unlawful within five years of the display being erected.  SB 563  
          also would have deleted the requirement that entities requiring  
          the removal of unlawfully erected signs pay sign owners just  
          compensation to do so.  (Held in Senate Rules Committee)


          AB 1499 (Benoit) of the 2005-06 Regular Session, would have  
          created an exemption to the OAA, to permit the City of Riverside  
          to erect an outdoor advertising display along Highway 91 to  
          promote economic activity for the Riverside Plaza.  (Vetoed by  
          Governor)


          AB 801 (Jones) of the 2005-06 Regular Session, would have created  
          an exemption from the OAA for one sign in the County of  
          Sacramento.  (Vetoed by Governor)


          AB 2441 (Klehs) of 2006, would have authorized an advertising  
          display in the redevelopment zone of the City of San Leandro  
                                                                      subject to specified conditions.  (Vetoed by Governor)


          AB 1518 (Jerome Horton) of the 2005-06 Regular Session, would have  
          exempted, from the prohibition against placing advertising  
          displays adjacent to landscaped freeways, any billboard located on  
          property owned by the Lennox School District, subject to certain  
          conditions.  (Moved to the inactive file in the Assembly)










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          AB 762 (Nuñez), Chapter 725, Statutes of 2003, created an  
          exemption to the OAA by allowing the National Latino Arts Council  
          to place an advertisement on the roof of a not-for-profit  
          educational academy.


          SB 190 (Perata), Chapter 54, Statutes of 2001, exempted from the  
          OAA the prohibition against placing advertising displays adjacent  
          to landscaped freeways, up to five advertising structures or signs  
          (billboards) used to support the Oakland-Alameda County Coliseum  
          Complex.




          Analysis Prepared by:                                               
          Eric Johnson / G.O. / (916) 319-2531  FN: 0000452