Today's Law As Amended

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AB-1405 Digital sign demonstration pilot program.(2017-2018)

As Amends the Law Today


 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. Digital Sign Demonstration Pilot Program
 The Legislature finds and declares all of the following:
(a) Communicating timely information to the traveling public 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 entities that visit and travel through the state.
(b) California presently 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. While this mechanism is effective, it does not provide real-time information to motorists.
(c) Recent advances in technology have made it possible to create reliable and effective digital signs that combine text with graphics in order to rapidly and clearly communicate important emergency and public service information to the users of California’s highways more safely and effectively than the current methods. These advanced technology digital signs could increase the efficacy and reliability of this information transmission by increasing the number and visibility of signs providing emergency and public service information, thereby enhancing the safety and travel experience of the people of California, and function as an extension and improvement of the existing California public information and emergency messaging communication efforts.
(d) On March 28, 2018, the department issued a report called the “Outdoor Advertising Report: Changeable Message Signs” pursuant to a statutory requirement (Section 7 of Chapter 27 of the Statutes of 2014) that examines the feasibility of conducting a pilot project to place commercial outdoor advertising, in the form of a message center, on state-owned changeable message signs. The department report concludes that it could be feasible to conduct a pilot project, which would allow the State to evaluate any potential safety implications and assess how much potential revenue could be generated.
(e) The department report notes there are significant challenges to implement a pilot project including concerns of safety to the traveling public, local agency and community approval, and operational impacts to the state highway system. It further notes that the department does not have state or federal authority to move forward because waivers or exemptions would be needed from the federal government pursuant to portions of the federal outdoor advertising regulations, the Outdoor Advertising Act (Chapter 2 (commencing with Section 5200) of Division 3 of the Business and Professions Code), and sections of the federal Manual on Uniform Traffic Control Devices.
(f) The department report concludes that, once appropriate authority is received, it would be feasible to conduct a phased four-year demonstration pilot program of 25 changeable message signs with message center capabilities to provide the appropriate test environment for the concept.
(g) It is the intent of the Legislature to require the department to establish a digital sign demonstration pilot program to study safety and operational impacts, assist in evaluating revenue assumptions, and determine risks and benefits of a next generation changeable message sign that displays advertising and traditional department messaging.
 For purposes of this article, the following terms mean the following:
(a) “Agreement” means a legally enforceable agreement for a pilot project to install and operate a digital sign or 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 technologies, and other criteria deemed appropriate by the department.
(c) “Changeable message sign” has the same meaning as defined in Section 101.14.
(d) “Contracting entity” means public or private entities, or consortia of those entities, that have entered into a comprehensive development lease agreement with the department for a pilot project pursuant to this section.
(e) “Digital sign” means a department-owned or controlled changeable message sign with message center capabilities that is designed to display various messages that provide information to the public, as well as advertising, by electronic means, including, but not limited to, digital and light-emitting diode (LED) technologies.
(f) “Pilot project” means to study, plan, design, construct, develop, finance, maintain, rebuild, improve, repair, lease, operate, or any combination of these, a state-of-the-art, full-color digital sign or signs within the rights-of-way of the state highway system.
 (a) Consistent with the requirements and purposes of this article, the department shall establish a digital sign demonstration program.
(b) As part of the program, the department may enter into lease agreements pursuant to Section 172.6 with public or private entities, or consortia of those entities, to establish pilot projects to install and operate new digital signs within the state highway system right-of-way.
(c) The department may authorize the installation and operation of up to 25 new digital signs under the program, which shall be installed and operated in different locations with the goal of testing the signs in diverse settings. The department may authorize the new digital signs to replace existing changeable message signs or to be established in new locations, except that digital signs established at new locations shall not be installed on scenic highways.
(d) The department shall authorize each pilot project to install and operate a specific number of digital signs but the total number of digital signs between all of the pilot projects shall not to exceed 25 digital signs.
(e) Before the installation of any digital sign, the department shall develop a plan and protocol, which shall be submitted to the Legislature, to measure the impact of the program, including, but not limited to, safety effects, benefits to the public, and revenue generation.
 (a) Notwithstanding any other law, and subject to any required federal approval authorizing the department to do so, the department may solicit proposals, accept unsolicited proposals, negotiate, and enter into comprehensive development lease agreements with public or private entities, or consortia of those entities, to conduct pilot projects, in a manner that best effectuates the purposes of this article, to install and operate a new digital sign or signs within the state highway system right-of-way, in a manner to best effectuate 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 competitive 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 a pilot project.
(b) An agreement shall provide that the contracting entity with which the agreement is entered into will bear all reasonable costs of the pilot project, including, but not limited to, costs of installation, maintenance, and operation of the pilot project.
(c) An agreement described in subdivision (a) shall do all of the following:
(1) Provide for construction, operation, and maintenance of a new digital sign or signs at locations selected for the pilot project by the department in consultation with the regional transportation planning agency or county transportation commission or authority in whose jurisdiction the project will be located and the Department of the California Highway Patrol.
(2) Provide for complete reversion of any ownership interest in any of the privately constructed, improved, operated, and maintained digital 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 digital signs, and may take those actions deemed necessary to protect public safety.
(5) Require that the agreement entered into pursuant to this section include indemnity, defense, and hold harmless provisions agreed to by the department and the contracting entity, including provisions for indemnifying the State of California against any claims or losses resulting or accruing from the performance of the contracting entity, including advertising on the digital signs, excluding any advertising approved in advance or provided by the department. This paragraph does not require the agreement to include any obligation of the State of California to indemnify, defend, or hold harmless the contracting entity.
(6) Provide for the contracting entity with which the agreement is made to contract and receive funds for the placement of commercial advertisements on the digital 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 in a proportion negotiated by the department but the agreement shall not allocate less than 50 percent of those revenues to the department after reasonable installation costs have been recovered by the contracting entity.
(7) Provide that the agreement shall cease on January 1, 2024, at which point commercial advertising shall cease unless authorized by a subsequent statute.
(d) The digital signs to be constructed pursuant to this article shall, during the term of the applicable agreement, be deemed to be a part of the state highway system for purposes of identification, maintenance, and enforcement of traffic laws, and part of the state highway system for emergency notification and other public service information purposes and for the purposes of Division 3.6 (commencing with Section 810) of Title 1 of the Government Code.
(e) Revenues from the digital signs shall be allocated between the contracting entity with which the agreement is made and the department in accordance with the agreement as provided in paragraph (6) of subdivision (c). Revenue derived from the project and received by the department, or any other revenue generated from advertising on the digital 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.
(f) The digital 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 digital signs.
(g) The department shall retain the ultimate right to determine whether the location for the placement of a digital sign has or will negatively impact a residential area or community. If the department determines that the location of a digital 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.
(h) For the purpose of facilitating a pilot project, the applicable agreement between the parties may include provisions for the lease of rights-of-way in, and airspace over or under, highways, public streets, rail, or related facilities, for the granting of necessary easements, and for the issuance of permits or other authorizations to enable the construction of the project. Facilities subject to an agreement under this section shall, at all times, be owned by the department.
(i) An agreement shall require digital signs on the state highway system to meet all requirements for noise mitigation, landscaping, pollution control, and safety that otherwise would apply if the department were designing, building, and operating the pilot project.
(j) Construction, alteration, demolition, installation, repair, and maintenance work for digital signs is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
 The department may exercise any power possessed by it with respect to transportation projects to facilitate pilot projects pursuant to this article. The department may provide services to the contracting entity for which the department is reimbursed, including, but not limited to, planning, environmental planning, environmental certification, environmental review, preliminary design, design, right-of-way acquisition, construction, maintenance, and policing of the project. The department shall regularly inspect the digital signs and require the contracting entity to maintain and operate the digital signs according to adopted standards. Except as may otherwise be set forth in the agreement, the contracting entity shall be responsible for all costs due to development, maintenance, repair, rehabilitation, and reconstruction, and operating costs.
 Advertising on the digital 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 digital signs shall enhance public messaging, including, but not limited to, safety campaigns, emergency notifications, travel times, and traveler information. All digital signs subject to this article shall be exempt from subdivision (d) of Section 5408 of the Business and Professions Code and from any and all regulations adopted in connection with subdivision (d) of Section 5408 of the Business and Professions Code, except that this exemption does not prevent the department from imposing any restrictions necessary for safety purposes.
 The department shall not enter into an agreement with any contracting entity that would cause or permit any digital sign to display or advertise alcohol, tobacco, firearms, sexually explicit material, political messages or advertisements, or any illegal activity. The department shall adopt policies and guidelines in connection with the content and formatting of the advertising.
 The department may use the digital signs for emergency messages, as needed, and dedicated time shall be provided to the department to use the digital 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 contracting entity with which it enters into an agreement pursuant to this article.
 (a) When choosing a contracting entity with which to enter into an agreement pursuant to Section 172.6 to effectuate the purposes of this article, the department may utilize, but is not limited to utilizing, one or more of the following procurement approaches:
(1) Solicitations of proposals for defined projects and calls for project proposals within defined parameters.
(2) Prequalification and short-listing of proposers prior to final evaluation of proposals.
(3) Final evaluation of proposals based on qualifications and best value.
(4) Negotiations with proposers prior to award.
(5) Acceptance of unsolicited proposals, with issuance of requests for competing proposals.
(b) When evaluating a proposal submitted by the contracting entity, the department or the regional transportation agency may award a contract on the basis of best value.
(c) The department may retain a consultant or adviser to assist in preparing the best value criteria, selection of a contracting entity, and oversight of a pilot 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 contracting entity or entities seeking to bid on the project.
(d) A contracting entity shall have the following qualifications:
(1) Evidence that the members of the contracting entity have completed, or have demonstrated the experience, competency, capability, and capacity to complete, a project of similar size, scope, or complexity, and that proposed key personnel have sufficient experience and training to competently manage and complete the design and construction of the project, and a financial statement that ensures that the contracting entity has the capacity to complete the project.
(2) The licenses, registration, and credentials required to design and construct the project, including, but not limited to, information on the revocation or suspension of any license, credential, or registration.
(3) Evidence that establishes that members of the contracting entity have the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance.
(4) Evidence that the contracting entity has workers’ compensation experience, history, and a worker safety program of members of the contracting entity that is acceptable to the department or regional transportation agency.
(5) A full disclosure regarding all of the following with respect to each member of the contracting entity during the past five years:
(A) Any serious or willful violation of Part 1 (commencing with Section 6300) of Division 5 of the Labor Code or the federal Occupational Safety and Health Act of 1970 (Public Law 91-596).
(B) Any instance in which members of the contracting entity were debarred, disqualified, or removed from a federal, state, or local governmental public works project.
(C) Any instance where members of the contracting entity, or its owners, officers, or managing employees submitted a bid on a public works project and were found to be nonresponsive or were found by an awarding body not to be a responsible bidder.
(D) Any instance where members of the contracting entity, or its owners, officers, or managing employees defaulted on a construction contract.
(E) Any violations of the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code), including, but not limited to, alleged violations of federal or state law regarding the payment of wages, benefits, apprenticeship requirements, or personal income tax withholding, or Federal Insurance Contributions Act (FICA) withholding requirements.
(F) Any bankruptcy or receivership of any member of the contracting entity, including, but not limited to, information concerning any work completed by a surety.
(G) Any settled adverse claims, disputes, or lawsuits between the owner of a public works project and any member of the contracting entity during the five years preceding submission of a bid under this article, in which the claim, settlement, or judgment exceeds fifty thousand dollars ($50,000). Information shall also be provided concerning any work completed by a surety during this five-year period.
 The Transportation Agency, in coordination with the department and the Department of the California Highway Patrol, shall annually submit a report to the fiscal and policy committees of the Legislature with jurisdiction over transportation matters with the first report due on or before July 1, 2019, and the final report due on or before July 1, 2024. The report shall include, but not be limited to, all of the following:
(a) The status of implementation of each agreement, including the number of digital signs placed and the locations of the digital signs placed.
(b) The public safety impacts of the digital signs, including, but not limited to, a comparison of the number of traffic incidents, accidents, injuries, and fatalities on the highways adjacent to a new sign in the five years prior to the placement of each sign and the time period since each sign was erected.
(c) The amount of revenue received, cost savings to the department, and the costs incurred by the department with respect to each pilot project, including costs incurred prior to the time the department entered into an agreement.
(d) An assessment of the effect the pilot projects have had on emergency notification, traveler information, and motorist safety and awareness campaigns.
(e) A description of the types of advertising content displayed on the digital signs.
(f) A recommendation on whether the pilot projects should be continued along with any recommended changes.
 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.