Amortization – the ability of a state or municipality to require a billboard company to take down a billboard after a fixed period of time without compensation – rears its ugly head from time to time.  Wenatchee, Washington passed an amortization law last year.  Amortization was a hotly debated topic when the US Senate debated the 1991 Surface Transportation Efficiency Act.  We previously carried Senator Mikulski’s pro-billboard comments during the debate.  Here are comments of five other senators on amortization during the debate.  Amortization was rejected 60-39 via a bi-partisan vote.

Senator Harry Reid (D – Nevada)

What current law will not allow, and what we are debating here today, is the ability of States, counties and cities to remove billboards without money compensation…Let me explain how amortization works…What does it mean?  It simply means that rather than the State or local government paying money compensation to billboard owners, the owners would be allowed a grace period to have the billboards removed.  In other words, a billboard owner would be allowed to keep his sign for a period of 3 to 5 years.  And this will be considered full payment; full compensation.  At the end of this time, the billboard owner must still remove the sign at his own expense…George Will, probably the most read syndicated columnist, recently wrote one of his columns about this very subject.  In his article he labeled amortization as “slow motion confiscation.”…As an economic matter, the amortization theory is far from full compensation.  How can an owner be compensated simply by getting a few years’ notice that he is going to lose all the value in his property?  Under this reasoning, a city could announce that there can be no buildings taller than 10 stories, then announce owners will be compensated by allowing them to occupy buildings for 5 years before leveling them; or a local government could claim eminent domain over your house to build a highway, then claim the compensation is a delay in the highway construction for a few years.

Senator John Breaux (D – Louisiana)

The second thing I would like to talk about is the legislation allowing the board which were legally erected to be taken down and removed without paying anybody anything for them.  I think that is wrong.  I think that is a violation of the Constitution of the United States which requires that no private property shall be taken for public use without just compensation.  The committee came up with a novel idea, which is typical of many cases in Washington.  We are not going to pay you any money.  We are going to pay you amortization.  If anybody thinks he can take amortization and go cash it, or take amortization and put it in the bank or take amortization and pay his bills with it, I want to let him know that is not possible.  Indeed, I think it is a novel concept the committee has come up with to take private property in this country and say we are not going to give you a check, we are not going to give you cash, we are not going to give you an IOU to  pay you for it ever, we are just going to say it has been up therefore it does not amount to anything, it is not worth anything; take it down.

Senator Steve Symms (R–Idaho)

…as far as this compensation issue with amortization, I find it incredible that someone says that you have a sign and let you use it for 5 more years and take a chainsaw to it, somehow that is paying you for it; I cannot quite understand that.

Senator Alan Simpson (R-Wyoming)

I certainly appreciate the desires of Senator Chafee and others to satisfy their constituencies in heavily urbanized States who do not want to look at cluttered billboards.  Current law allows your States to pay the owners for the sign and then to take them down.  But in the open West it is a different story.  Billboards are a very valuable advertising tool – for businesses and communities.  Billboards are an investment.  Not only a fiscal investment, but an investment in. that community and attracting traffic off of the interstates and into some of our smaller communities.  It is inappropriate to amortize these billboards as a means of compensation.  No money is ever paid for the removal of the signs and it is just a clever way to eventually force billboards out of existence.

Senator Howell Heflin (D-Alabama)

Just as important as the right to do business is the right to possess private property, without fear that the State or its subdivisions can confiscate it without payment of cash compensation…I do not want to see this perfectly legitimate industry decimated by amortization.

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