[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




                                                   S. Hrg. 102-000 deg.

  TRAVERSING THE TWISTS AND IMPACTS OF THE HIGHWAY BEAUTIFICATION ACT 
                         UPON SMALL BUSINESSES

=======================================================================

                                HEARING

                               before the

      SUBCOMMITTEE ON RURAL ENTERPRISE, AGRICULTURE, & TECHNOLOGY

                                 of the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                      WASHINGTON, DC, MAY 15, 2003

                               __________

                           Serial No. 108-16

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house


                                 ______

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                            WASHINGTON : 2003
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                      COMMITTEE ON SMALL BUSINESS

                 DONALD A. MANZULLO, Illinois, Chairman

ROSCOE BARTLETT, Maryland, Vice      NYDIA VELAZQUEZ, New York
Chairman                             JUANITA MILLENDER-McDONALD,
SUE KELLY, New York                    California
STEVE CHABOT, Ohio                   TOM UDALL, New Mexico
PATRICK J. TOOMEY, Pennsylvania      FRANK BALLANCE, North Carolina
JIM DeMINT, South Carolina           DONNA CHRISTENSEN, Virgin Islands
SAM GRAVES, Missouri                 DANNY DAVIS, Illinois
EDWARD SCHROCK, Virginia             CHARLES GONZALEZ, Texas
TODD AKIN, Missouri                  GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia  ANIBAL ACEVEDO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania           ED CASE, Hawaii
MARILYN MUSGRAVE, Colorado           MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona                DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania            JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire           MICHAEL MICHAUD, Maine
BOB BEAUPREZ, Colorado               LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana               ENI FALEOMAVAEGA, American Samoa
STEVE KING, Iowa                     BRAD MILLER, North Carolina
THADDEUS McCOTTER, Michigan

         J. Matthew Szymanski, Chief of Staff and Chief Counsel

                     Phil Eskeland, Policy Director

                  Michael Day, Minority Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                               Witnesses

                                                                   Page
Kothe, Sarah, House of Os Bed & Breakfast........................     5
Taylor, Professor Charles R., Villanova University...............     7
Byrnes, Chris, Defenders of Property Rights......................     8
Gorin, John P., National Association of RV Parks and Campgrounds.    10
Eck, John P., National Association of Truck Stop Owners..........    12
Martin, Joe, American Hotel and Lodging Association..............    13
Maguire, Meg, Scenic America.....................................    15

                                Appendix

Opening statements:
    Graves, Hon. Sam.............................................    23
Prepared statements:
    Kothe, Sarah.................................................    26
    Taylor, Professor Charles R..................................    30
    Defenders of Property Rights.................................    35
    Gorin, John P................................................    44
    Eck, John P..................................................    47
    Martin, Joe..................................................    51
    Maguire, Meg.................................................    55
    Huber, Karen.................................................    71
    Frantzis, John...............................................    73

                                 (iii)

 
      HEARING ON TRAVERSING THE TWISTS AND IMPACTS OF THE HIGHWAY 
                BEAUTIFICATION ACT UPON SMALL BUSINESSES

                              ----------                              


                         THURSDAY, MAY 15, 2003

                  House of Representatives,
Subcommittee on Rural Enterprises, Agriculture and 
                                        Technology,
                                Committee on Small Business
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 12:59 p.m. in 
Room 2360, Rayburn House Office Building, Hon. Sam Graves 
[chairman of the Subcommittee] presiding.
    Present: Representatives Graves, Ballance.
    Chairman Graves. I think we will go ahead and get started. 
The Ranking Member, Mr. Ballance, had to go to the Floor for a 
few minutes. He should be back very shortly and join us.
    I do want to say good afternoon, and welcome to the Rural 
Enterprises, Agriculture and Technology Subcommittee on the 
Small Business Committee. We are going to, in the interest of 
time, try to keep everybody's testimony to five minutes.
    We do have a vote scheduled for 2:00. Depending on whether 
or not that is hit or not, when that vote hits we will probably 
lose everybody or most everybody in the room, so we are going 
to try to get through all the testimony first because that is 
the most important thing is to have testimony on record, and 
then we will see about questions. Hopefully we will be able to 
get to those, too, but we do want to get through all of the 
testimony, so we are going to try to keep everybody to the five 
minutes.
    I might explain the lights down there and how they work. 
You will have a green, and then it will go to yellow when you 
have one minute left, and then it will show red when time is 
up.
    I will go ahead and give my opening statement, and then we 
will see if Mr. Ballance is able to be here before I am 
finished.
    Today we are discussing the impact of the Highway 
Beautification Act, or HBA, on small businesses across America. 
When President Lyndon Johnson signed the Highway Beautification 
Act of 1965, he did so with the intent to insure effective 
control of billboards along our highways. The bill controls 
outdoor advertising along interstate and federally-aided 
primary highways.
    While the legislation allows for billboards in commercial 
and industrial zones, it mandates a state compliance program 
that includes the development of state standards and promotes 
the removal of illegal signs. The law failed to take into 
account its effect on small business, particularly in rural 
areas that rely heavily on billboard advertising. These federal 
burdens are extremely anti small business.
    Seventy to 80 percent of billboard advertising is utilized 
by local business, and the majority of this is small business. 
In rural areas such as in my district or large parts of my 
congressional district, local business utilization jumps to 90 
percent. Two-thirds of billboard advertising in rural areas is 
for the travel and tourism industry.
    In the rural areas, billboard advertisement is the most 
effective and cost efficient means of advertising. Since 80 
percent of all travel in the United States is by car, 
newspaper, radio and TV ads do not capture passing travelers. 
Billboard advertisements are the only medium that targets that 
market.
    Numerous studies all point to the same conclusion. 
Billboard advertising significantly contributes to those 
businesses that utilize or are allowed to utilize advertising. 
Commercially, businesses that have lost signs lose business.
    Bob Evans Restaurant did their own experiment on billboard 
advertising. They covered up several of their billboards along 
interstates to measure the advertising effectiveness. The 
impacted restaurants reported a 10 percent loss of sales during 
the time that the billboards were out of sight.
    Studies show that an estimated 82.2 of small businesses 
would lose sales if they did not have access to billboard 
advertisement. In rural America, outdoor advertising serves a 
variety of functions for small business owners. Billboards 
allow small businesses to give directions to their place of 
business, information on the products and service that their 
business offers and the price of their products and services.
    However, small businesses do not have the funds to spend on 
extensive advertising. Therefore, they rely on billboards 
indicating to the passer by the location of their business. The 
outdoor advertising provides convenient information to 
consumers who use the directions and the critical product 
identification for the businesses who benefit from increased 
commercial activity.
    The Intermodal Surface Transportation Efficiency Act of 
1991--it was called IST--amended the Highway Beautification Act 
of 1965 to prohibit billboards placed on designated scenic 
byways that are part of the interstate or primary highway 
system. In addition, IST and the subsequent HBA amendments 
directed additional federal funds towards billboard removal and 
control.
    I fear that broad federal regulations have severely 
restricted small businesses' ability to remain competitive. 
Simply put, small business in rural communities that thrive on 
the patronage of their community and those outside their city 
limits cannot survive under current laws governing outdoor 
advertising.
    I would like to recognize--well, he is not going to be 
here; he should be here shortly--Mr. Ballance.
    This is also an issue that I have dealt with extensively in 
my time in the state senate too on the Transportation 
Committee, and I look forward to this particular angle from the 
small business perspective.
    We will go ahead and jump right into statements from our 
witnesses. I do want thank you all for being here. I know some 
of you have come a long way to be here today.
    Before we get started, I do want to ask unanimous consent 
to include statements from all the Members in the record. I 
think we have that.
    [Mr. Graves' statement may be found in the appendix.]
    Chairman Graves. Here is Mr. Ballance. You are just in 
time. I will go ahead. Would you like to give an opening 
statement?
    Mr. Ballance. Yes, I would.
    Chairman Graves. Okay. I just finished with mine. If you 
want to go ahead and go through yours, that would be fine. I 
asked for unanimous consent, too, to make sure all the Members' 
statements are recorded in the record.
    Mr. Ballance. Thank you, Mr. Chairman, and good morning to 
everyone. I would like to give an opening statement.
    The purpose of today's hearing is to review the effect of 
the Highway Beautification Act on small businesses. This 
legislation, enacted in 1965, controls outdoor advertising 
along more than 300,000 miles of the nation's highway system 
that allows the location of billboard in commercial and 
industrial areas and requires just compensation for the removal 
of non-conforming billboards.
    The Committee is holding this hearing because the Act will 
be reauthorized as part of the Transportation Equity Act and 
because of its importance to the travel and tourism industry, 
which our economy depends so much upon.
    It is important that as we look at this legislation today 
we balance the needs of the travel and tourism industry to 
advertise their services with the need to protect the natural 
scenic, historic and architectural tourist sites on which these 
small businesses depend.
    As you may know, Mr. Chairman, I was born on a farm in 
rural eastern North Carolina, and I am well aware of the plight 
of small business owners in rural America. In fact, 98 percent 
of North Carolina's businesses are small firms, and they employ 
47 percent of the state's employees.
    Clearly, effective advertising is critical to our nation's 
rural and small businesses. What I think is important for the 
Committee to explore is not only the role billboards play in 
rural small business advertising, but also what other tools 
exist that can help them get their word out.
    Listen to any small business owner, and you will always 
hear how they are trying to make ends meet. One of the most 
strapped areas in their budgets is advertising, which means 
that money spent in this area must give them the most bang for 
their buck. When you look at billboard cost in comparison to 
other advertising costs at a small business owner's fingertips, 
billboards can be prohibitively expensive. The average rent for 
a billboard is approximately $2,000 per month.
    Effective signage alternatives such as logo signs and 
tourist oriented directional signs can increase business at a 
lower cost without detracting from the character of the 
community. The typical highway logo sign maintained by a state 
transportation department costs roadside businesses an average 
of $800 per year.
    Logo signs and tourist oriented directional signs also 
level the playing field for small businesses. Rather than 
having to compete with a 1,200 foot McDonald's Value Meal sign, 
small businesses can get a value for their dollar by 
advertising on these signs, in guidebooks and on the Internet.
    Advertising on the D.C. Chamber of Commerce Web site costs 
a small businesses between $3.50 and $12.50 per year, depending 
on the number of employees. An ad in Missouri's official 
visitor's guide costs a small business as little as $16.75 per 
year with 525,000 publications being printed.
    I take very seriously any federal law that unfairly or 
unnecessarily places small businesses in further jeopardy. I 
have been acutely aware of the billboard situation in my home 
state. North Carolina ranks ninth in the nation for the number 
of billboards per state with more than 10,000 permitted 
billboards on federal aid highways. This translates to almost 
two billboards for every mile, with a person seeing at least 89 
bills in an hour long trip.
    I am coming to a close, Mr. Chair. Part of the problem 
North Carolina is facing is that the federal government has not 
provided funding necessary to remove non-conforming signs. I 
strongly believe that we should not be going in and taking down 
billboards without providing compensation. However, we have 
failed to provide the means necessary to do so, and states are 
unable to bear the cost themselves.
    Keeping this all in mind, what we also need to be looking 
at are the positive aspects of billboard control. Removing 
billboards does not hurt the economy, but rather increases 
business as more tourists flock to areas that preserve their 
natural beauty.
    For example, in Vermont tourism spending rose 50 percent in 
the two years after it became billboard free. In the 10 years 
following its ban on billboards, retail sales in Houston, 
Texas, increased 100 percent. More than 700 communities 
nationwide prohibit the construction of new billboards as a 
means to protect community character and quality of life, both 
of which directly impact local economies. In my home state, 
more than 90 communities prohibit the construction of new 
billboards, including prime tourist destinations like Durham, 
Kitty Hawk, Nags Head and Sugar Mountain.
    Continuing to control billboards through the Highway 
Beautification Act will help small business owners attract 
tourism to their communities, increase their economic well 
being and help their businesses thrive.
    Mr. Chairman, clearly small businesses in rural communities 
have challenges when it comes to getting the word out about 
their services. I want to thank you for highlighting this issue 
and the need rural business owners have for assistance.
    I look forward to working with you on this issue. I hope 
that in our discussions today and in the future we can look 
beyond billboards as the answer to small businesses' 
advertising struggle and look to issues such as identifying the 
best advertising medium for a particular business and ensuring 
that small businesses are able to take advantage of the vast 
advertising opportunities available through the Internet. Then 
we will truly ensure that our rural small businesses have the 
tool they need to succeed.
    I want to thank the witnesses for taking the time to be 
here today. I look forward to hearing their discussions.
    Thank you very much.
    [Mr. Ballance's statement may be found in the appendix.]
    Chairman Graves. Thank you, Mr. Ballance.
    At this time I would like to welcome our first witness, who 
is Sarah Kothe. She is the owner and operator of House of Os 
Bed & Breakfast. She has traveled out here to Washington with 
her husband, Gary, from Salisbury, Missouri, and I welcome you 
here.
    Thank you for being here, and I look forward to your 
testimony.

STATEMENT OF SARAH KOTHE, OWNER AND OPERATOR, HOUSE OF OS BED & 
                 BREAKFAST, SALISBURY, MISSOURI

    Ms. Kothe. Good afternoon, Chairman Graves, Ranking Member 
Ballance. It is an honor and a privilege to have the 
opportunity to share with you my story about my small business 
that has been affected economically by the Highway 
Beautification Act of 1965 regarding signs along federal and 
state highways.
    My husband, Gary, and I live approximately seven miles 
south of the small, rural town of Salisbury, which is located 
in Chariton County, Missouri. It is approximately halfway 
between St. Louis and Kansas City. Salisbury is about 12 miles 
west of Moberly, which is the home of General Omar Bradley 
Airport, and northeast of historical Arrow Rock, Missouri.
    Salisbury has a small motel, typically used by construction 
workers, but did not have a bed and breakfast. I saw the need 
and the opportunity to be successful in opening a bed and 
breakfast. After Gary's father's death in 1997, we inherited 
his house, which is located just east of our home and the 
center of our farm. This was the logical place for my dream to 
come true. I named my bed and breakfast House of Os, after my 
father-in-law.
    We are very proud of our efforts, as we know Os would have 
been. We are a very hard-working farm family where many 
sacrifices have been made to be able to own and operate our 
business. Os loved being with people, having good conversation 
and lots of laughter. We feel the bed and breakfast is a 
tribute to him, and we enjoy sharing his love of the rural life 
with others.
    Naturally, we are located in a rural area. We felt in order 
to promote the House of Os an outdoor sign was the most 
efficient and affordable means to attract and direct business. 
My business is difficult, at best, to find without signs 
directing the route to my place of business.
    I have three children. I am a granny with four 
grandchildren and another expected this fall. All of my family 
enjoys coming home to the farm where they pitch in to help with 
the chores, but also enjoy the relaxing atmosphere and 
peacefulness that the rural life offers.
    Gary and his father, Oswald--we called him Os--they farmed 
together 900 acres until Os' death in 1997. This operation is 
labor intensive, and Gary is limited to his daily activity due 
to progressive rheumatoid arthritis.
    I retired from employment with USDA FSA County Office 
approximately three years ago chiefly to be around home to help 
Gary with our farming operation. I also had health issues, 
which included malignant lumpectomy with maximum radiation 
treatment in 1999, along with another bout of cancer resulting 
in mastectomy in June of 2002, and I am on continuing therapy.
    I had long dreamed of operating the bed and breakfast, so 
retirement did not necessarily mean quit working. Instead, I 
was able to have the best of both worlds--to run my bed and 
breakfast and to be home with Gary.
    We inquired of the Missouri Department of Transportation 
about permits before installing a directional sign. We were 
told by MoDOT employees that as long as the sign was placed out 
of the path of their equipment for snow removal, they saw no 
need for a permit. We proceeded to install a two foot by four 
foot metal sign in the field at the corner of Highway 5 and 
County Road 416. We were given permission by the landowner to 
place the sign in her field.
    All was well until Kaye Stacy, MoDOT Outdoor Advertising 
Permit Specialist, notified us that we had 30 days to remove 
the sign. I expressed my concern that customers would not be 
able to find the bed and breakfast, but to no avail. I was 
informed that I had no permit on record, and when I asked to be 
forwarded an application for such, I was told I could not 
apply.
    At this point I obtained an attorney to assist me in this 
matter. I was informed that because I was in a rural community 
with no commercial business within 600 feet of the sign and 
because the sign was not on land contingent with my bed and 
breakfast, MoDOT would remove this sign at my expense. Needless 
to say, the sign came down, and it remains down.
    As a result, my business has suffered drastically. Because 
I no longer have any outdoor advertising, even my neighbors ask 
me if I am still in business. The resulting effects of the 
Highway Beautification Act of 1965 has stifled my business. As 
a small business owner, I work hard to fully comply with all 
the rules and regulations regarding my business. For rural 
businesses, outdoor signage is the most useful and economical 
sound means of advertising.
    Again, thank you, Chairman Graves, Ranking Member Ballance. 
I will be happy to answer any questions you may have.
    I also have with me the correspondence from MoDOT and my 
attorney, as well as a photograph of my sign, which has been 
removed, if anybody wants to review this.
    [Ms. Kothe's statement may be found in the appendix.]
    Chairman Graves. Thank you, Ms. Kothe.
    We are now going to hear from Professor Charles Taylor. 
Professor Taylor is a Professor of Marketing at Villanova 
University. He received his Ph.D. in Marketing from Michigan 
State University. He is currently president-elect of the 
American Academy of Advertising.
    Professor Taylor has been selected as a Fulbright Senior 
Scholar by the Council of International Exchange of Scholars. 
He is listed in Who's Who in American Education and Who's Who 
in the World.
    Thank you, Professor Taylor, for being here. I appreciate 
your testimony.

    STATEMENT OF CHARLES R. TAYLOR, PROFESSOR OF MARKETING, 
                      VILLANOVA UNIVERSITY

    Mr. Taylor. Thank you, Chairman Graves. Chairman Graves and 
Ranking Member Ballance, thank you very much for inviting me to 
testify today.
    Over the last 14 years, I have conducted extensive research 
on outdoor advertising, its regulation and its impact on 
business, and today, as you requested, I would like to give you 
my view of how the results of my studies impact on outdoor 
advertising.
    Chairman Graves already mentioned in his opening remarks 
that in rural areas billboards predominantly serve small, local 
business. This is a well established fact that the vast 
majority of businesses in rural areas are small, local 
businesses.
    There are several specific points I want to make. First 
off, billboards provide bottom line value to many small 
businesses. A large scale, national survey of billboard users 
that I conducted that will be forthcoming in the Journal of 
Advertising Research, a peer reviewed journal that is well 
respected in my field, showed conclusively that billboard 
owners believe that they will lose business if they lose access 
to billboards.
    The average estimate of lost sales among small businesses 
was more than 18 percent in terms of those who use billboards 
estimating how much they would lose. Follow-up studies show 
that the same is the case in Texas and Missouri. The 
overwhelming majority of billboard users indicate that they 
will lose sales if they do not have access to billboards, and 
small businesses are even more prone to indicate that they will 
lose sales.
    Another point I want to make is that small businesses use 
billboards primarily to provide information to consumers. A 
content analysis study that was published in the Journal of 
Public Policy and Marketing in 1994 and a follow-up published 
in the same journal in 1997 showed that by far the most common 
use of a billboard was to provide directions to a place of 
business. In fact, nearly 75 percent of the billboards in the 
Michigan study I did provide directions to a place of business.
    It is also important to mention that in addition to 
directions, billboards allow businesses to communicate other 
types of important information to consumers. As such, motorist 
information panels or TODs are completely inadequate 
substitutes for billboards in rural areas.
    I say this for three primary reasons. First off, motorist 
information panels do not provide adequate ability to give 
directions to hard-to-find locations. If you happen to be 
located just off the interstate with a big on-premises sign 
they might be able to find you, but if you own a small bed and 
breakfast that requires a little bit more directions than that 
then you are in trouble.
    A second key issue and reason why motorist information 
panels are inadequate is that these other types of information 
are extremely important to communicate to consumers. For 
example, you might want to communicate information about the 
quality of your product offer. If you are a hotel, you might 
want to mention that you give an AARP discount or that the AAA 
approves you. If you serve hamburgers, you might want to 
indicate that they have 100 percent beef.
    You might want to provide information on convenience like 
you are open 24 hours on a billboard. You cannot do that on a 
motorist information panel in any context that I know about. 
You might even need to tell what you offer. If you are a gas 
station or mini mart, you might want to note that you sell soda 
and sandwiches on your billboard, something again you cannot do 
on a motorist information panel.
    The third reason why motorist information panels are 
inadequate is because they do disproportionately harm small 
businesses. A huge business like McDonald's that has invested 
millions of dollars in advertising over the years gains from 
that brand equity, and people instantly know what to expect at 
McDonald's, where if you are Joe's Hamburger Shop they do not 
know that.
    I would also like to mention, to summarize and close, a 
couple of brief points. My studies also show that billboard 
users overwhelmingly believe that other media are not 
substitutes for billboards, and there is nobody better to ask 
whether there are substitutes than the billboard users. Every 
advertising textbook out there will also tell you that these 
other media are not good substitutes for billboards, especially 
for small rural businesses.
    One other misnomer I would like to address is the notion 
that a large proportion of the public is against billboards. In 
fact, a meta-analysis study of 36 public opinion surveys of 
billboards, every major one I could find recently, shows that 
only about 20 percent of the public favors bans on billboards 
and that 82 percent of the public--this is an average across 
all the studies that have been conducted over time, literally 
thousands of observations--agree that billboards help 
businesses to attract customers.
    Chairman Graves and Ranking Member Ballance, thank you very 
much for the opportunity to address you.
    [Mr. Taylor's statement may be found in the appendix.]
    Chairman Graves. Thanks, Professor Taylor.
    We do have a vote that was unexpected at this point. It is 
an appeal of the ruling of the Chair, I believe. I think we 
will recess just for a few minutes. We will go over and vote 
and then be right back over. So if you will just sit tight, it 
should not take us very long at all.
    We will recess for it. It will take us about 10 or 15 
minutes.
    [Recess.]
    Chairman Graves. We can go ahead and get started again. Mr. 
Ballance should be right behind me somewhere.
    We just heard from Professor Taylor. Now we are going to 
hear from Chris Byrnes. Chris--let me see--Defenders of 
Property Rights, which is kind of the angle we always took in 
the state legislature, too, so it will be interesting to hear 
your testimony. And I appreciate you being here today.

   STATEMENT OF CHRIS BYRNES, COUNSEL, DEFENDERS OF PROPERTY 
                             RIGHTS

    Mr. Byrnes. First, I would like to thank the Chairman and 
the Subcommittee for the opportunity to address the Highway 
Beautification Act and the effect of sign removal on small and 
rural businesses.
    As an attorney with Defenders of Property Rights, I am 
deeply concerned about the forced removal of signs and the 
implications for the economic and property rights of these 
removals on small and rural businesses. Signs, both on premise 
signs and billboards, are absolutely essential to the economic 
vitality and survival of small and rural businesses. Currently 
signs are under siege at the state and local level by 
governments seeking to impose a sign-free, aesthetic utopia.
    We have heard testimony today about the importance of 
signs, so I just sort of want to underscore that. The signs 
serve a variety of functions, both economic and non-economic. A 
1969 study by the Federal Highway Administration found a high 
correlation between traffic safety and high visibility 
commercial signs.
    Signs also support our $3 trillion-a-year retail industry. 
That is $3 trillion in revenues. $250 billion of these revenues 
are from advertising and marketing alone, so you can see that 
advertising is absolutely key to retail success for big and 
small businesses.
    This is certainly true in the case of on premise signs. A 
study conducted by the University of San Diego's School of 
Business Administration found that addition or modification to 
an existing on-premise sign increased weekly sales by five 
percent. Addition of directional signs on a retail site 
increased sales four to 12 percent. This translates into on an 
annual basis to I guess a 4.75 percent increase in sales.
    Now, sign removal, consequently, would translate into equal 
or greater decreases in revenue. This is especially important 
for small and rural businesses. Small and rural businesses are 
often financially ill equipped to weather a downturn in the 
realm of a 10 or 15 percent decrease in revenues.
    An argument can be made or had been made that advertising 
is really not that important to small and rural businesses in 
terms of signs and billboards because they often rely on a 
long-established clientele, they remain in the same locations 
for years, and that customers can find them without the visual 
cues provided by a sign.
    This may have been the reality four years ago, but this is 
simply not the case today. The increased mobility of Americans, 
business cycles spurring new customer bases in and out of rural 
areas all the time, they are no longer immune from business 
cycles, nor are they remote from most customers. In fact, many 
small and rural businesses cater specifically to out-of-town 
residents who are unfamiliar with the location, so advertising 
becomes even more essential, given the increased mobility and 
the specific demographic that they target.
    Signs are under siege at the state and local government 
level on an unprecedented level. Four states now currently ban 
the construction of billboards all together--Hawaii, Vermont, 
Maine and Alaska. Rhode Island and Oregon have banned the 
construction of new billboards, and localities and communities 
in 22 states, many of which include rural areas, have banned 
the new construction of billboards.
    Short of outright bans, a lot of communities have resorted 
to far more subtle methods of removing signs and billboards 
through a scheme called amortization. Luckily, the Highway 
Beautification Act sort of forecloses this as an option for 
signs and billboards near federal aid highways by mandating the 
payment of cash compensation.
    However, the threat still remains at the state and local 
level where a sign is declared non-conforming, the sign owner 
is given time to remove it, but the town or locality removing 
the sign does not pay just compensation as required by the 
Fifth Amendment to the Constitution.
    The argument goes well, the market will reimburse the owner 
for any loss of property from removal of the sign because the 
time period will allow him to recoup his investment. That is 
simply not what the Constitution mandates. It mandates that the 
government pay just compensation for the removal of the sign.
    Signs are absolutely essential to a free market economy and 
a free society, and Congress should certainly keep those 
concerns in mind when considering any changes of 
reauthorization to the Highway Beautification Act.
    Thank you for the opportunity to speak to this issue. I 
would be happy to answer any questions you may have.
    [The statement from Defenders of Property Rights may be 
found in the appendix.]
    Chairman Graves. Thank you, Mr. Byrnes.
    We are now going to hear from David Gorin, Gorin & King 
Associates. David, thank you for being here.

  STATEMENT OF DAVID GORIN, KING & GORIN ASSOCIATES, NATIONAL 
            ASSOCIATION OF RV PARKS AND CAMPGROUNDS

    Mr. Gorin. Thank you very much, Mr. Chairman. Good 
afternoon.
    My name is David Gorin. I am a government affairs 
consultant for the National Association of RV Parks and 
Campgrounds. I was the president of that association for 15 
years before retiring recently, and in my past I have also 
served as the national chairman of the Small Business 
Legislative Council and have owned small businesses and do so 
today.
    I want to congratulate both you, Mr. Chairman, and Mr. 
Ballance on your opening remarks. I think your comments and the 
statistics you have quoted were right on target and need to be 
heard more in the business community and among those people who 
have different views on the effectiveness of billboard 
advertising.
    It occurred to me listening to your comments that one of 
the most effective kinds of research you can do in the small 
business community is simply to look at what small business 
people do. They do not spend their advertising dollars lightly. 
The number of billboards operated and owned by small business 
is probably the best kind of research as to the effectiveness 
of those particular billboards.
    The National Association of RV Parks and Campgrounds, or 
ARVC as it is usually called, has a long history of support and 
recognition of outdoor advertising or billboards as a key 
element in the marketing and advertising strategies of our 
members in particular, of travel and tourism businesses 
specifically and small businesses in general.
    As an industry comprised predominantly of family owned 
smaller businesses catering to highway travelers and tourists, 
our members constantly seek cost effective ways to reach that 
difficult moving target audience. A great deal of the industry 
has been built on the broad shoulders of large and small 
billboards along the highways with attractive graphics catching 
the attention of the traveler and ingenious copyrighters using 
an absolute minimum of letters to craft enough of a message to 
capture the mind of the viewer whizzing by at 55 miles an hour 
or faster.
    Let me also emphasize that our comments today are endorsed 
by the National Travel, Tourism and Recreation Coalition for 
Surface Transportation. This coalition is comprised of national 
tourism and recreation organizations that support enactment of 
strong and adequately funded reauthorization legislation that 
reflects the interests and needs of the tourism and recreation 
industries.
    It is important to note that for small businesses that 
serve the traveler, the choice of advertising media to reach 
that market is limited, and the importance of billboard 
advertising is very significant. Unless the highway traveler 
has had the opportunity to research their food, fuel, 
accommodations and attraction options in a particular area, the 
typical print, radio and television media serving an area is of 
no value to the small business or to the traveler.
    While there are advertising options such as directories, 
brochure distribution in visitors centers, travel magazines and 
guides, Web sites and other various media, studies have shown, 
as you have indicated yourselves, that billboard advertising is 
among the most effective way for a travel or tourist oriented 
business to reach its market.
    Studies conducted by various state tourism departments, as 
well as the outdoor advertising industry, indicate that highway 
travelers generally start considering their dining, 
accommodations and entertainment options approximately 30 to 60 
minutes prior to the time they wish to make a stop. Without the 
important information provided by billboards in many parts of 
the country, the traveler is simply left to their own devices 
to find the necessary travel services they may require.
    With over 80 percent of all travel in the U.S. being done 
on the road, providing information to the highway traveler is a 
big and important job. While new technologies and new 
advertising concepts may be helpful, none has proven as 
effective in both reach and cost as billboards.
    We are well aware of the importance of the highway logo 
sign program in effect on most interstate highways. However, we 
do not consider that program as a viable alternative to 
billboards. Logo signs are small. They convey no message of 
value to the consumer other than to give notice that a 
particular business is located off the next exit.
    They are of little value to a non-branded business that is 
not quickly recognized by the consumer, and they are located so 
close to the exit and are intended to provide some guidance for 
last minute or changed need or to merely provide a reminder of 
direction for a consumer who made a decision many miles before 
by virtue of a billboard.
    I would at this point just point out the rest of my 
statement where we discuss a number of other issues related to 
the upcoming reauthorization of the highway bill and would 
encourage this Committee to look at other options of importance 
to small business in that particular bill.
    Thank you.
    Chairman Graves. Thank you, Mr. Gorin. I appreciate it.
    [Mr. Gorin's statement may be found in the appendix.]
    Chairman Graves. We are now going to hear from John Eck, 
who is the owner of Servicetown Plaza in Fredericksburg, 
Virginia. John, thanks for being here.

  STATEMENT OF JOHN P. ECK, OWNER, SERVICETOWN TRAVEL PLAZA, 
          NATIONAL ASSOCIATION OF TRUCK STOP OPERATORS

    Mr. Eck. Thank you, Chairman Graves, Ranking Member 
Ballance. Thank you for the opportunity to testify today on the 
effects of the Highway Beautification Act on small businesses.
    My name is John Eck, and I am the owner of Servicetown 
Travel Plaza in Fredericksburg, Virginia. I have been an 
independent travel plaza owner/operator for the past nine 
years. I employ approximately 70 people. We are located on 
Interstate 95 at Exit 133, approximately 50 miles south of 
Washington.
    I am testifying today on behalf of NATSO, the national 
trade association representing America's travel plazas and 
truck stops. I also serve on the Virginia Department of 
Transportation Roadway Signage Advisory Committee.
    The interstate highway system was built to efficiently move 
people and goods across the country. Without billboards, 
interstate travel becomes less efficient. People traveling from 
state to state need to know where they can stop for a meal, to 
fuel their cars and, in my case, most importantly, trucks and 
rest. Our businesses depend on the interstate motorists, and 
they in turn depend on us for food, fuel and rest.
    We have heard countless of NATSO members who have seen the 
benefits of billboards, and in fact many NATSO members have 
stated that their business has experienced a significant drop 
in sales following a storm that damaged their billboard. A 
recent survey of NATSO members revealed that travel plazas 
consider billboards extremely important to the success of their 
small businesses.
    More importantly, billboards are information tools for 
interstate travelers, and labeling billboards as merely 
advertising tells only a small part of the story. Billboards 
are critical links to service providers for drivers in 
unfamiliar territory.
    For the long haul trucker spending many nights away from 
home, highway signage is an absolute necessity. Professional 
drivers require information about highway businesses. They 
cannot just stop anywhere. They need to know what facilities 
can accommodate their trucks, where they can fuel and eat, and 
they may not be familiar enough with an area to make shopping 
choices without highway signage to guide them.
    Highway signage is particularly important to the truck stop 
and travel plaza industry and those that it serves. Truckers 
and other highway travelers account for approximately 90 
percent, and often more, of an interstate based travel plaza's 
business. A significant portion of these drivers are unfamiliar 
with an area and significantly rely on signage to locate places 
to stop for fuel, food and rest breaks. In fact, a recent 
industry survey of highway travelers found that two-thirds of 
those who were new visitors to a particular area reported that 
they observed highway signage.
    Travel plaza operators spend most of their advertising 
dollars on billboards because it has proven to be most 
efficient in relating information about services to the 
customer base. It is estimated that the truck stop, travel 
plaza and truck fuel stop would lose 15 to 25 percent in sales 
if billboards were banned. This is particularly true in states 
where trees and shrubbery prevents motorists from seeing the 
travel plaza or even high-rise signage from the interstate. For 
an industry that generated $60.2 billion in sales in 2002, that 
would mean a loss of $9 billion to $15 billion each year.
    Billboards are very important to truckers because the 
services provided by a travel plaza or truck stop vary widely. 
Some fuel stops, for example, offer little more than diesel and 
gasoline, while a full service truck stop or travel plaza might 
provide hundreds of parking spaces, fast food and sit down 
restaurants, convenience stores, motels, fuel, showers, truck 
repair facilities and more.
    A trucker who is looking for a place to stop in the evening 
needs to know if that business offers truck parking. For 
truckers who are looking for a place to stop as their hours of 
service are expiring, signage can guide them to a safe, legal 
parking place.
    People who need to stop in an unfamiliar area for emergency 
purposes or during severe weather certainly would not 
characterize a billboard as an eyesore, but as a critical tool.
    There is no doubt about it. Small business owners like me 
need billboards and other highway signage to be able to attract 
motorists who are unfamiliar with the area. A small business 
owner cannot rely on billboards to communicate its specific 
offerings to motorists. RVers, bus drivers and truckers need to 
know where they can park. Families need to know where they can 
make one stop for gas and food.
    Billboards are an extremely effective means of advertising. 
I simply cannot afford to rely on print or broadcast 
advertising and would reach far more individuals by a simple 
highway sign.
    I urge Congress to support interstate signage so that the 
traveler can get more information that they need while on the 
road. Thank you.
    [Mr. Eck's statement may be found in the appendix.]
    Chairman Graves. Thank you, Mr. Eck.
    We are now going to hear from Joe Martin, who is the owner/
operator of the Best Western Mark Motor Hotel in Weatherford, 
Oklahoma. Is it Weatherford?
    Mr. Martin. Weatherford. Yes, sir.
    Chairman Graves. Thanks for being here.

  STATEMENT OF JOE MARTIN, OWNER/OPERATOR, BEST WESTERN MARK 
 MOTOR HOTEL, HAMPTON INN & SUITES, AMERICAN HOTEL AND LODGING 
                          ASSOCIATION

    Mr. Martin. Thank you, Chairman Graves, Ranking Member 
Ballance.
    As a representative of the American Hotel and Lodging 
Association and as an owner and operator of hotels, I would 
like to thank you for allowing me the opportunity speak about 
what has been for many years our number one advertising medium 
in marketing our hotels to the traveling public, namely outdoor 
advertising and billboards.
    One of my locations is not unlike thousands across the U.S. 
It is a Best Western hotel located just off Interstate 40 in 
rural Oklahoma approximately one hour west of Oklahoma City in 
the community of Weatherford. The interstate bypasses the main 
part of our community, and our greatest opportunity to draw 
travelers into our community and to our hotel is provided by 
outdoor advertising or billboards.
    We have done internal research over many years that shows 
us that approximately 70 percent of our customers arrive at our 
hotel as a result of our billboard advertising. We feel so 
strongly about the benefits of outdoor advertising that we 
actually own 10 of the 13 billboards that are used to market 
our hotel. We lease the other three from outdoor advertising 
companies. This is probably one thing that makes our property 
unique as it relates to the use of billboards.
    Recently we had the opportunity to truly realize the 
importance of our billboards to our success. We had a landowner 
of one of our billboards that we owned that was near the exit 
to reach our hotel come to us to tell us that he had an 
opportunity to develop the land where our billboard was located 
and that we were going to have to remove the billboard. Of 
course, we complied with his request.
    What we found as a result was after many years of 
remarkable consistency in our business, after removing this 
billboard we experienced a 10 percent decrease in business. 
After several months, we were able to lease a billboard 
location very near the one we lost, and almost immediately we 
saw a return to our normal business trends. This proved to us 
that our hotel's success and the jobs it represents in our 
small community is quite dependent upon our ability to maintain 
the use of outdoor advertising or billboards.
    I recently built a Hampton Inn & Suites in Stillwater, 
Oklahoma, the home of Oklahoma State University. We have 
devoted 50 percent of our entire advertising budget to outdoor 
advertising, and many of our first time guests, even though we 
do other promotion, tell us that they did not know we were 
there until they saw our billboards.
    I might also add that in some cases outdoor advertising 
provides a certain level of safety to travelers. We have all 
heard of stories of unfortunate situations where individuals or 
families have lost their way or taken a wrong turn only to find 
themselves in unfamiliar surroundings and very vulnerable to 
dangerous circumstances. In such cases billboards are not only 
used for marketing purposes as I have spoken of today, but they 
also are a public service to the traveling public.
    Thank you, Mr. Chairman.
    Chairman Graves. Thank you, Mr. Martin.
    [Mr. Graves' statement may be found in the appendix.]
    Chairman Graves. We are now going to hear from Meg Maguire. 
Meg is the president of Scenic America. I want to thank you for 
being here today.

      STATEMENT OF MEG MAGUIRE, PRESIDENT, SCENIC AMERICA

    Ms. Maguire. Thank you very much, Mr. Chairman and 
Congressman Balance, for the opportunity to testify today.
    I am Meg Maguire. I am the president of Scenic America. We 
have 25 organizations around the country, and both of your 
states have a Scenic America affiliate associated in those 
states, so we have some real familiarity with your states.
    I think all of us would probably agree that there is a lot 
that is wrong with the Highway Beautification Act. I would take 
issue with a number of my colleagues here today on the panel, 
but certainly the Highway Beautification Act is not one that we 
think is a very good federal Act. On the other hand, it needs 
complete reform and not piecemeal action, and we are going to 
be urging the Congress after T-21 to take a look at the Highway 
Beautification Act as a whole.
    I think all of us can agree that signs are necessary in 
America for people to get around, so I take issue with the 
gentleman from Defenders of Property Rights that we are somehow 
looking to have a sign free America. That is simply not the 
case. What we are looking for is a balance between information 
that signs provide and scenic beauty, the kinds of things that 
people are traveling now to experience.
    Let me stick to what I understand to be the principal focus 
of this hearing today, and that is the issue of information 
about small businesses. First, let us dispel the notion that 
there are not a lot of billboards in America. Indeed, Ladybird 
Johnson's goal of beautifying America's highways has proven to 
be quite elusive.
    In 1991, the Congressional Research Service estimated that 
there were 425,000 billboards on America's highways and that 
that number was going up by six percent per year. By any way 
you count that, whether it is a straight line or compounded, 
you would find that there are 731,000 billboards to 885,000 
billboards on America's federal aid highways alone, not 
counting state roads and city streets, so we are not really 
talking about, you know, today getting rid of all of those 
billboards.
    Visual pollution hurts local economies, and it lowers 
property values. While you are looking at this Act, I would 
encourage you to look at the experience of homeowners who have 
had billboards go up near their properties. There is a famous 
case in West Virginia where the property values of two 
homeowners were devalued by 30 percent because billboards went 
up.
    Congressman Graves, in your own district--not in your 
district; in your state--this gentleman, Mr. McElfresh, built a 
home in the Ozarks in the 1950s because it is such a beautiful 
area. I have been there. A huge billboard went up in 1997, and 
now he cannot see the night sky. The bugs swarm around. I would 
really ask that you have a look at his situation as a property 
right. In my testimony I have included several other examples, 
and we have more to share with you.
    On the question of scenic byways, I would urge you not to 
rely on billboard proliferation along scenic byways, but rather 
to work very closely to establish a widespread, tourist 
oriented directional sign program along our scenic byways.
    Let me give you one example of billboard proliferation and 
the damage that it has done. In Holmes County, Ohio, which is a 
strong Amish county with weak billboard controls, they had 
applied for scenic byway designation, and while the Ohio 
Department of Transportation was considering that application 
100 billboards went up throughout the county. Now they feel 
that they are not nearly as scenic as they were, and they are 
all heartsick about it.
    Before we go to the Scenic Byways Program, I would urge you 
not to do that. Let us look at good signage for rural America. 
I think there are some landscape friendly alternatives to 
billboard advertising. Congressman Ballance mentioned some of 
those.
    We are very interested in those new technologies and how 
small businesses can benefit from those. You have mentioned the 
Internet. There are also various kinds of in car technologies 
now. Certainly the Internet is one of the major ones, but there 
are also handy guides that you can keep in your car to tell you 
all the kinds of travel and lodging information that you would 
find at any of the interchanges along the interstate. As you 
are looking at this problem of small business, please do look 
very carefully at the variety of alternatives.
    Billboards have been down in Vermont since 1975. The last 
one came down then. I do not know if you have traveled to 
Vermont. It is a beautiful state, and they have a very 
successful tourist-oriented directional sign program there that 
helps all small businesses.
    Missouri now has one as well, and I believe that the folks 
who have testified today about their sign problem are indeed 
eligible for the Missouri TOD program. I have given them some 
information and some people to call. We think they got bad 
advice from the Missouri DOT, but I have given them some 
information to check out.
    Let me just close by saying that the issue of travel and 
tourism today is a very important one in America. This is the 
third largest industry retail business that is growing, and it 
is tremendously important that we have good signage systems.
    I would like to offer to work with this Committee on 
looking at how tourist-oriented directional signs might get a 
big boost from this Committee in helping rural America to be 
signed so tourists can find out about where these businesses 
are and also to call your attention to the National Scenic 
Byways Program, which is one of the best strategies for 
creating new small businesses and for getting people to 
patronize small businesses.
    Since I am out of time, I will just submit my remarks for 
the record, and I appreciate the time to be here.
    Chairman Graves. Thank you very much, Ms. Maguire.
    [Ms. Maguire's statement may be found in the appendix.]
    Chairman Graves. Everyone's remarks, too, in full, will be 
submitted for the record, if you did not happen to get through 
all of them.
    I do want to start out with questions. One of the problems 
I have with the scenic byways, and this is directed to you, Ms. 
Maguire, is, you know, it is the property rights issue. We talk 
about, you know, signs going up and whether they should not go 
up or the scenery destroyed or whatever the case may be, but do 
you not think that to an extent that is a decision of the 
landowner?
    I mean, it is the landowner's scenery, at least in 
Missouri. You know, should it not be their determination on 
whether or not they want signs? That is an infringement on 
property rights, I would think.
    Ms. Maguire. Well, the National Scenic Byways Program, and 
when the states agree to have a program they do agree that 
their scenic byways will be billboard free; that is, that no 
new billboards will go up. They do not require the removal of 
the existing billboards.
    This is because the traveling public has a right to expect 
that when they get off on a scenic byway, whether it is a state 
scenic byway or a national scenic byway, that that will be a 
beautiful area, so those rules in the scenic byways program are 
really designed to keep certain areas that are designated by 
the states--these are not designated by the federal government. 
To keep those truly scenic.
    Chairman Graves. They are not necessarily designated by the 
federal government, but the federal government forces the 
states into these programs, which I have a problem with 
mandates, by withholding or threatening to withhold federal 
funds.
    Ms. Maguire. That is not the case with the Scenic Byways 
program, not at all. You are eligible for a small pot of money 
if you are part of the Scenic Byways program. Right now it is 
only $26 million a year. There are no withholdings whatsoever 
for not being part of the Scenic Byways program.
    We still have a couple of states that are not part of the 
program. However, they are seeking to become part of the 
program because it is a wonderful way for international 
advertising for the small businesses along those highways.
    Chairman Graves. We accept your offer to work with us to 
come up with alternatives. As soon as we are done with T-21, we 
are going to address this issue. I know it is going to come up 
on the Transportation Committee, which I also sit on. We are 
going to be addressing this and using the testimony that was 
given here today to help guide us through that.
    I do have a question for Ms. Kothe. Do you have any idea 
what happened after your sign was taken down, your business, 
how much it suffered? Do you have any statistics or anything 
like that?
    Ms. Kothe. I do not have any statistics so to speak. I know 
last year at this time I had as much as three to four on 
average per month confirmed reservations. Today I have no 
confirmations. I have some leads, but no confirmations.
    Chairman Graves. Mr. Ballance?
    Mr. Ballance. Thank you, Mr. Chair. I do have lots of 
questions. I am going to forego most of them. This is Thursday 
afternoon, and it is travel time.
    To follow up, Ms. Kothe, as I understand it, the highway 
that your bed and breakfast is located on does in fact allow 
billboards. Is that correct?
    Ms. Kothe. Some are up, but I was told that mine was put up 
after the Grandfather Act, so I could not fall in that 
Grandfather Act.
    Mr. Ballance. So it was not a matter that your sign did not 
conform; it was simply you were told that no other billboards 
were going up on the highway?
    Ms. Kothe. I was quoted the certain sections of the law and 
that it did not confirm with the mandatory size and type and 
all of that.
    Mr. Ballance. Okay. I do not want to cut you off, but that 
could have been a conformity with some technical aspects of the 
bill?
    Ms. Kothe. Yes.
    Mr. Ballance. Was your sign on the highway right-of-way, or 
was it on private property?
    Ms. Kothe. No, no. It was in a field off of there. Gary 
farms that field, and we rent it from the landowner. It was 
well in the field and away from the highway equipment and all, 
and so really the only one bothered by it was Gary as far as--
--.
    Mr. Ballance. Again, I apologize. I do not want to cut you 
off, but I am trying to rush through this.
    Do you advertise in any alternate type such as AAA, the 
Internet, any of those? Have you looked into those?
    Ms. Kothe. I am listed in Missouri Vacation Planner, and I 
have Internet. I have a Web site. I am a member of the Chamber 
of Commerce, so I am listed with that as well.
    Mr. Ballance. All right. Dr. Taylor, to date very little 
data has been collected about the effect of limiting billboards 
on small businesses. I could say more about that, but would you 
respond to that issue?
    Mr. Taylor. I would cite my study, my survey of small 
businesses, of businesses who use billboards. There were many 
small businesses who responded.
    The main findings of the study were, first, that small 
businesses do not believe that these other media are 
substitutes. We have got the benefit of having people extremely 
knowledgeable in the hotel and restaurant business and truck 
stops here, and they are telling you the consumers do not make 
decisions this way.
    You know, the vast majority of their business does not come 
from people who go on the Internet. You know, to have a good 
Internet Web site is not cheap either. I mean, if you have a 
Web site, I mean, you are reaching customers in Korea, in 
Germany, you know, as well as the local area. These people's 
business comes from people that are driving through the area in 
a lot of these contexts.
    The other issue that came out of this study is that 
billboard users report that they will lose. The vast majority 
report that they will lose business if they are denied access 
to their billboards. Over 80 percent say that, and then the 
average loss among all businesses, even including those who 
report they will not lose any business, is about 15 percent, 
and among small businesses it is on the order of 20 percent.
    Mr. Ballance. Now, would you agree that the Federal Highway 
Administration does not have comprehensive data on this issue 
and has not collected it?
    Mr. Taylor. I do not know that the Federal Highway 
Administration has collected it. What I am suggesting is that I 
have done a relevant study myself.
    Mr. Ballance. Was your study commissioned by anyone in 
particular?
    Mr. Taylor. That study was supported by the Advertising 
Association of America. Yes.
    Mr. Ballance. Okay. Also if I may just put this question to 
you. Your 1994 study also found that 74.2 percent of billboards 
in rural areas provide information that is potentially useful 
to tourists.
    A similar study found that 72 percent of people surveyed in 
Rhode Island responded that they received either very little or 
no useful information about products and services from 
billboards. In Florida, the margin of those who derived more 
useful information from logo signs than billboards about 
restaurants, gas stations and other services were 63 to 16. In 
Missouri, the margin was 68 to 18 in favor of logo signs.
    Can you explain these disparities?
    Mr. Taylor. Yes. First off, my Michigan study was a content 
analysis, meaning we analyzed the information that is actually 
on the billboard, so it was not a survey of public opinion.
    I believe the Rhode Island study that you cite was a phone 
survey where they started out talking about tons of different 
types of pollution. They asked consumers how they felt about 
litter, how they felt about sewage, you know, how they felt 
about air pollution, and then they started asking them 
questions about billboards, so my view is it is a very biased 
survey, unlike my studies, has not survived peer review and 
gotten into academic journals. I cannot take that kind of thing 
seriously, quite honestly.
    Mr. Ballance. Mr. Chairman, I do have some other questions, 
but I think I am just going to forego. I understand that there 
are some planes that are warming up. People need to make 
connections.
    Chairman Graves. We do have a few minutes yet. I do have a 
couple more questions if you want to ask too, Mr. Ballance.
    Mr. Ballance. All right.
    Chairman Graves. One is for Mr. Byrnes. In your testimony 
there was something I wanted to clear up, too, that I was 
curious about. You said that on-premise signs do not enjoy the 
same protections under the Highway Beautification Act as 
billboards. Did I hear that correctly?
    Mr. Byrnes. That was in an earlier testimony. I do not 
think that is in the current draft of the testimony.
    Chairman Graves. Okay. I did not know if you wanted to 
explain that a little bit further or not because I read that in 
one of the submitted testimonies.
    Mr. Byrnes. I believe the Highway Beautification Act 
mandates just compensation for outdoor advertising structures, 
for the removal of them. There was some I guess confusion as to 
the implementing regulations as to whether on-premise or on-
property signs are also included within the definition of 
outdoor advertising structure.
    Chairman Graves. Okay. Mr. Gorin, you had mentioned looking 
into other means of advertising. Do you have any ideas?
    Mr. Gorin. Well, low frequency radio has been tried in 
several places and is used in the tunnel in Boston and some 
other places where regular signage is not available. On board 
communications, satellite communications. A lot of vehicles are 
being equipped with those kinds of things today.
    I do not necessarily see any of those as adequate 
replacements or substitutes for billboards. I see them as 
additional media that small businesses will have available in 
the future. I do not think there is anything at the moment that 
I see coming that would replace highway signage as we know it 
today.
    Chairman Graves. Mr. Ballance?
    Mr. Ballance. Yes, Mr. Chairman.
    Ms. Maguire, there are a lot of communities that are 
destinations for tourists. In my studies here, it seems that 
many of those communities do not want these signs. Am I correct 
on that? What is the impact in those communities of tourism?
    Ms. Maguire. First, the billboards are largely regulated at 
the state and local level, and so states can make decisions 
about most things having to do with outdoor advertising.
    Your state, for example, Congressman Ballance, voted not to 
have billboards along the new I-40. In Missouri, in 2000 there 
was a ballot initiative, and 49 percent of the people in 
Missouri voted to stop new billboard construction; not to bring 
billboards down, but to stop new billboard construction. That 
is the best poll of all when people are voting at the polls 
about this issue.
    The decision not to have billboards was reaffirmed in 
Alaska in 2000 by 72 percent of the voters. Vermont advertises 
on billboards in New Hampshire. There is a beautiful picture of 
a pastoral scene that is in your testimony saying come to 
Vermont. We have no billboards, and here is why. You see a 
beautiful, pastoral scene.
    People take very different perspectives on this, but there 
is a lot of state and local control over these issues, and 
those communities, the list that I have handed out to you of 
the communities that have stopped new billboard construction, 
have said we have enough of these signs. We do not want them 
anymore. We do not want any more of them because they are 
beginning to detract from the very things that people come to 
our communities to see, and they have not suffered.
    Houston, Texas, had a real problem attracting good 
businesses there in the early 1980s. They had 10,000 
billboards, 10,500 in Houston. They clamped down on new 
construction, and today through attrition they have about 
5,000, so the city is looking far, far better. That was the 
decision that Houstonians made. It was not something that the 
federal government had any business in.
    I think that state and local governments really have a lot 
of control over this issue and are right at the heart of where 
the people are.
    Mr. Ballance. What are your thoughts about the impact if we 
do not fund this just compensation issue from the federal 
level?
    Mr. Martin. I think that this is one of the big problems 
with the Highway Beautification Act. We said you can remove 
billboards, but then we did not give any money out after the 
first couple of years.
    It is really a forgotten piece of public business, and we 
think it is very important that this come into focus and get 
the kind of attention that it needs, but it has to be done with 
the proper facts.
    I take issue with the research that Mr. Taylor has done. 
Again, we have results at the polls that would suggest that a 
lot of Americans do not want to see their communities littered 
with billboards, and this is in no way to detract from the 
tremendously important issues of small business signage.
    If that is your point of departure, which I believe it is 
for this Committee, then you start not with the fact that we 
have lots and lots of billboards, but what is the best way to 
get people to those businesses, all kinds of businesses in 
rural America.
    Mr. Ballance. Mr. Chairman, I am going to end with this. I 
am on this Committee because I support small businesses. I also 
count myself as an environmentalist. In my 20 years of public 
service, I just believe there is an avenue where parties can 
come together and reach an amicable solution.
    Ms. Kothe, I am certainly concerned about your sign and 
your business, but I am also concerned that if we are serious 
about these billboards that we certainly have to put up our 
money. The states do not have any. I believe in the Fifth 
Amendment. We just have to work a little harder. Some of the 
alternatives that have been talked about here today may be 
helpful.
    Thank you very much.
    Chairman Graves. Thank you, Mr. Ballance.
    I appreciate everyone being here today. This is a very 
important issue, and you are right. The focus of this Committee 
is small business and how billboards affect that, what effect 
it has on that business when those billboards are taken down.
    Personally, I have not only that, but a second problem with 
it, and that is property rights. I do think people should also 
have the right to do what they want with their property when it 
does not affect others. You know, I can see property rights 
devaluation in maybe some of the urban areas. In the rural 
areas it is not so much of an issue, but I do have a problem 
with that.
    I look forward to working with you on coming up with some 
solutions and looking forward to trying to come up with some 
solutions, alternatives as far as that goes, for small business 
to be able to get their point across and be able to give 
directions.
    We will be working on this. After we get done with the 
federal reauthorization of the transportation bill, which is T-
21--that is the new acronym for it--we will be looking into 
this, making changes. It will probably be a major overhaul of 
the bill because there are problems with it.
    I look forward to working with all of you, if you can, to 
give us some input into that. All of your testimonies will be 
recorded. We appreciate that. That is the most important part 
is to get that on record so we can use that.
    Again, I want to thank everybody for being here today and 
taking part. I apologize for the vote in the middle of the 
hearing, but that is obviously part of what we do out here.
    Thank you very much for everyone coming. The hearing is 
adjourned.
    [Whereupon, at 2:19 p.m. the Subcommittee was adjourned.]

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