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Senate approves bill to require fair-market compensation when municipalities end billboard use
Summary
The Senate passed a substitute to SB 98 after extended debate, requiring just compensation when cities or counties remove or terminate lawful outdoor advertising as a nonconforming use; sponsors argued it protects property owners’ balance sheets while opponents urged local negotiation and moratoria.
The Utah Senate on Feb. 23 passed a second substitute to Senate Bill 98, a measure that requires municipalities to pay fair-market compensation when they terminate lawfully permitted outdoor advertising by declaring signs nonconforming.
Sponsor Senator O'Keefe argued the bill protects sign owners from an immediate devaluation of assets after an ordinance declares billboards nonconforming: “All we're saying is if you take down a good sign, then pay us,” he said, urging that compensation follow the constitutional requirement of just compensation for takings.
Senators who opposed the measure urged patience and local negotiation. Senator Fordham said counties had been working toward a moratorium to resolve differences with sign companies and called the bill premature. Senator Black warned that declaring signs nonconforming en masse had already spread contamination and balance-sheet consequences for sign owners and their lenders and argued compensation was appropriate.
The bill’s text clarifies that cities retain powers to acquire billboards by gift, purchase, agreement, exchange or eminent domain, but when they invoke eminent domain the owner must receive just compensation rather than a purely amortization-based formula. Sponsor O'Keefe emphasized the bill does not remove municipal authority to declare nonconforming uses, but seeks to ensure property owners are compensated when the government causes the devaluation.
The bill drew multiple amendments and detailed floor debate about amortization periods and what constitutes fair market value, including questions about leased land and the treatment of contracts tied to billboards. An amendment to lengthen a temporary brewer/distributor licensing provision (proposed in related amendments during debate) failed; the floor ultimately called the question and the second substitute was approved. The Senate clerk recorded the vote as 26 ayes, 2 nays, 1 absent; the bill will be placed on the third-reading calendar.
The next procedural step is third reading on the Senate floor; if passed on third reading, SB 98 would move to the House for further consideration.
