[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3957 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 3957

To direct the Federal Communications Commission to take certain actions 
 to increase diversity of ownership in the broadcasting industry, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 25, 2019

Mr. Butterfield (for himself, Ms. Clarke of New York, Mr. Cardenas, Mr. 
  Rush, Mr. Veasey, and Mr. Hastings) introduced the following bill; 
  which was referred to the Committee on Energy and Commerce, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To direct the Federal Communications Commission to take certain actions 
 to increase diversity of ownership in the broadcasting industry, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Expanding Broadcast Ownership 
Opportunities Act of 2019''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) One of the main missions of the Federal Communications 
        Commission, and a compelling governmental interest, is to 
        ensure that there is a diversity of ownership and viewpoints in 
        the broadcasting industry.
            (2) The Commission should continue to collect relevant data 
        and conduct studies on such diversity and make appropriate 
        recommendations to Congress on how to increase the number of 
        minority- and women-owned broadcast stations.
            (3) Data from 2014 shows that, of the over 1,700 commercial 
        broadcast television stations in the United States, less than 6 
        percent are owned by women, and less than 3 percent are 
        minority-owned. With respect to radio stations, women owned 
        approximately 7 percent of FM broadcast radio stations, and 
        minorities owned less than 3 percent of such stations.
            (4) Women and minority ownership is 5 to 10 times higher in 
        other industries than in the broadcasting industry.
            (5) During the 17 years that a minority tax certificate 
        program was in place at the Commission (from 1978 to 1995), the 
        Commission issued 287 certificates for radio stations and 40 
        certificates for television stations.
            (6) The Commission can also support minority- and women-
        owned entrants into the broadcasting industry by implementing 
        an incubator program in which existing licensees assist new 
        entrants in the operation of broadcast stations.

SEC. 3. FCC REPORTS TO CONGRESS.

    (a) Biennial Report Containing Recommendations for Increasing 
Number of Minority- and Women-Owned Broadcast Stations.--Not later than 
180 days after the date of the enactment of this Act, and not less 
frequently than every 2 years thereafter, the Commission shall submit 
to Congress a report containing recommendations for how to increase the 
total number of broadcast stations that are owned or controlled by 
members of minority groups or women, or by both members of minority 
groups and women.
    (b) Biennial Report on Number of Minority- and Women-Owned 
Broadcast Stations.--Not later than 180 days after the date of the 
enactment of this Act, and not less frequently than every 2 years 
thereafter, the Commission shall submit to Congress a report that 
states the total number of broadcast stations that are owned or 
controlled by members of minority groups or women, or by both members 
of minority groups and women, based on data reported to the Commission 
on Form 323.

SEC. 4. TAX CERTIFICATE PROGRAM FOR BROADCAST STATION TRANSACTIONS 
              FURTHERING OWNERSHIP BY SOCIALLY DISADVANTAGED 
              INDIVIDUALS.

    (a) Requirements for Issuance of Certificate by FCC.--
            (1) In general.--Part I of title III of the Communications 
        Act of 1934 (47 U.S.C. 301 et seq.) is amended by adding at the 
        end the following:

``SEC. 344. TAX CERTIFICATE PROGRAM FOR BROADCAST STATION TRANSACTIONS 
              FURTHERING OWNERSHIP BY SOCIALLY DISADVANTAGED 
              INDIVIDUALS.

    ``(a) Issuance of Certificate by Commission.--Upon application by a 
person who engages in a sale of an interest in a broadcast station 
described in subsection (b), subject to the rules adopted by the 
Commission under subsection (c), the Commission shall issue to such 
person a certificate stating that such sale meets the requirements of 
this section.
    ``(b) Sales Described.--The sales described in this subsection are 
the following:
            ``(1) Sale resulting in or preserving ownership by socially 
        disadvantaged individuals.--A sale of an interest in a 
        broadcast station if, immediately following the sale, the 
        station is owned by socially disadvantaged individuals 
        (regardless of whether the station was owned by socially 
        disadvantaged individuals before the sale).
            ``(2) Sale by investor in station owned by socially 
        disadvantaged individuals.--In the case of a person who has 
        contributed capital in exchange for an interest in a broadcast 
        station that is owned by socially disadvantaged individuals, a 
        sale by such person of some or all of such interest.
    ``(c) Rules.--The Commission shall adopt rules for the issuance of 
a certificate under subsection (a) that provide for the following:
            ``(1) Limit on value of sale.--A limit on the value of an 
        interest the sale of which qualifies for the issuance of such a 
        certificate. The limit shall be no lower than $10,000,000 and 
        no higher than $50,000,000.
            ``(2) Minimum holding period.--In the case of a sale 
        described in subsection (b)(1), a minimum period following the 
        sale during which the broadcast station must remain owned by 
        socially disadvantaged individuals. The minimum period shall be 
        no longer than 3 years.
            ``(3) Cumulative limit on number or value of sales.--A 
        limit on the total number of sales or the total value of sales, 
        or both, for which a person may be issued certificates under 
        subsection (a).
            ``(4) Participation in station management by socially 
        disadvantaged individuals.--Requirements for participation by 
        socially disadvantaged individuals in the management of the 
        broadcast station.
    ``(d) Annual Report to Congress.--The Commission shall submit to 
Congress an annual report describing the sales for which certificates 
have been issued under subsection (a) during the period covered by the 
report.
    ``(e) Definitions.--In this section:
            ``(1) Owned by socially disadvantaged individuals.--The 
        term `owned by socially disadvantaged individuals' means, with 
        respect to a broadcast station, that--
                    ``(A) such station is at least 51 percent owned by 
                one or more socially disadvantaged individuals, or, in 
                the case of any publicly owned broadcast station, at 
                least 51 percent of the stock of such station is owned 
                by one or more socially disadvantaged individuals; and
                    ``(B) the management and daily business operations 
                of such station are controlled by one or more of such 
                individuals.
            ``(2) Socially disadvantaged individual.--The term 
        `socially disadvantaged individual' means a woman or an 
        individual who has been subjected to racial or ethnic prejudice 
        or cultural bias because of the identity of the individual as a 
        member of a group without regard to the individual qualities of 
        the individual.''.
            (2) Deadline for adoption of rules.--The Commission shall 
        adopt rules to implement section 344 of the Communications Act 
        of 1934, as added by paragraph (1), not later than 1 year after 
        the date of the enactment of this Act.
            (3) Report to congress on program expansion.--Not later 
        than 6 years after the date of the enactment of this Act, the 
        Commission shall submit to Congress a report regarding whether 
        Congress should expand section 344 of the Communications Act of 
        1934, as added by paragraph (1), beyond broadcast stations to 
        cover other entities regulated by the Commission.
            (4) Examination and report to congress on nexus between 
        diversity of ownership and diversity of viewpoint.--
                    (A) Examination.--Not later than 60 days after the 
                date of the enactment of this Act, the Commission shall 
                initiate an examination of whether there is a nexus 
                between diversity of ownership or control of broadcast 
                stations (including ownership or control by members of 
                minority groups or women, or by both members of 
                minority groups and women) and diversity of the 
                viewpoints expressed in the matter broadcast by 
                broadcast stations.
                    (B) Report to congress.--Not later than 2 years 
                after the date of the enactment of this Act, the 
                Commission shall submit to Congress a report on the 
                findings of the Commission in the examination under 
                subparagraph (A), including supporting data.
    (b) Nonrecognition of Gain or Loss for Tax Purposes.--
            (1) In general.--Subchapter O of chapter 1 of the Internal 
        Revenue Code of 1986 is amended by inserting after part IV the 
        following new part:

        ``PART V--SALE OF INTEREST IN CERTAIN BROADCAST STATIONS

``SEC. 1071. NONRECOGNITION OF GAIN OR LOSS FROM SALE OF INTEREST IN 
              CERTAIN BROADCAST STATIONS.

    ``(a) Nonrecognition of Gain or Loss.--If a sale of an interest in 
a broadcast station, within the meaning of section 344 of the 
Communications Act of 1934, is certified by the Federal Communications 
Commission under such section, such sale shall, if the taxpayer so 
elects, be treated as an involuntary conversion of such property within 
the meaning of section 1033. For purposes of such section as made 
applicable by the provisions of this section, stock of a corporation 
operating a broadcast station shall be treated as property similar or 
related in service or use to the property so converted. The part of the 
gain, if any, on such sale to which section 1033 is not applied shall 
nevertheless not be recognized, if the taxpayer so elects, to the 
extent that it is applied to reduce the basis for determining gain or 
loss on any such sale, of a character subject to the allowance for 
depreciation under section 167, remaining in the hands of the taxpayer 
immediately after the sale, or acquired in the same taxable year. The 
manner and amount of such reduction shall be determined under 
regulations prescribed by the Secretary. Any election made by the 
taxpayer under this section shall be made by a statement to that effect 
in his return for the taxable year in which the sale takes place, and 
such election shall be binding for the taxable year and all subsequent 
taxable years.
    ``(b) Minimum Holding Period; Continued Management.--If--
            ``(1) there is nonrecognition of gain or loss to a taxpayer 
        under this section with respect to a sale of property 
        (determined without regard to this paragraph), and
            ``(2) the taxpayer ceases to fulfill any requirements of 
        the rules adopted by the Federal Communications Commission 
        under paragraph (2) or (4) of section 344(c) of the 
        Communications Act of 1934 (as such rules are in effect on the 
        date of such sale),
there shall be no nonrecognition of gain or loss under this section to 
the taxpayer with respect to such sale, except that any gain or loss 
recognized by the taxpayer by reason of this subsection shall be taken 
into account as of the date on which the taxpayer so ceases to fulfill 
such requirements.
    ``(c) Basis.--For basis of property acquired on a sale treated as 
an involuntary conversion under subsection (a), see section 1033(b).''.
            (2) Clerical amendment.--The table of parts for subchapter 
        O of chapter 1 of the Internal Revenue Code of 1986 is amended 
        by inserting after the item related to part IV the following 
        new part:

        ``Part V--Sale of Interest in Certain Broadcast Stations

``Section 1071. Nonrecognition of gain or loss from sale of interest in 
                            certain broadcast stations.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to sales of interests in broadcast stations after 
the date that is 1 year after the date of the enactment of this Act.
    (d) Sunset.--The amendments made by this section shall not apply 
with respect to sales of interests in broadcast stations after the date 
that is 16 years after the date of the enactment of this Act.

SEC. 5. INCUBATOR PROGRAM.

    Not later than 180 days after the date of the enactment of this 
Act, the Commission shall amend its Report and Order in the matter of 
rules and policies to promote new entry and ownership diversity in the 
broadcasting services, MB Docket No. 17-289, FCC 18-114, adopted on 
August 2, 2018, to do the following:
            (1) Expand the incubator program provided for in such 
        Report and Order to permit a licensee to provide financial 
        support or operational support, or both, to a qualifying 
        incubated entity that owns or wants to own a television 
        broadcast station.
            (2) Expand the eligibility criteria for an incubated entity 
        under such program to include broadcast stations owned by 
        socially disadvantaged individuals.

SEC. 6. DEFINITIONS.

    In this Act:
            (1) Broadcast station.--The term ``broadcast station'' has 
        the meaning given such term in section 3 of the Communications 
        Act of 1934 (47 U.S.C. 153).
            (2) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.
            (3) Owned by socially disadvantaged individuals.--The term 
        ``owned by socially disadvantaged individuals'' has the meaning 
        given such term in section 344 of the Communications Act of 
        1934, as added by section 4.
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