BILL ANALYSIS Ó AB 1373 Page 1 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, | | AB 1373 Page 2 | | |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. AB 1373 Page 3 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. AB 1373 Page 4 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 AB 1373 Page 5 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 AB 1373 Page 6 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. AB 1373 Page 7 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. AB 1373 Page 8 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. AB 1373 Page 9 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. AB 1373 Page 10 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) AB 1373 Page 11 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 AB 1373 Page 12 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) AB 1373 Page 13 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