BILL NUMBER: SB 1397INTRODUCED BILL TEXT 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 introduced, 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 highway system, 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: 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. (e) "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. (f) "Person" means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity. (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) Notwithstanding any other law, and subject to federal approval authorizing the department to do so, the department may enter into an agreement with one person to conduct a single project, which shall include a demonstration phase, in a manner that best effectuates the purposes of this article. The department shall conduct a best value 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. (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 person 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 person, 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 equal to not less than 15 percent of the number of existing and planned changeable message signs at initiation of the project and shall be conducted on routes and highway corridors at sign locations selected by the department. 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 person 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 person conducting the project shall be entitled to recover from the department any unreimbursed capital or operating expenses. (8) Provide for the person 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 person 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. 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 person who would cause or permit any changeable message sign to display or advertise alcohol, tobacco, firearms, sexually explicit material, 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 person with whom it enters into an agreement pursuant to this article. 173.4. (a) When choosing the person 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 person 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 person, 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 person or persons seeking to bid on the project. 173.6. No later than two years after the 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 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.