Carriage of Independent Programmers Tax Credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45U.

Carriage of Independent Programmers Credit

(a)

Allowance of credit

For purposes of section 38, in the case of any eligible distributor, the carriage of independent programmers credit determined under this section for the taxable year is, with respect to each agreement for qualifying carriage entered into by such eligible distributor, the lesser of—(1)the net license fees paid or incurred by such eligible distributor during such taxable year under such agreement for qualifying carriage, or(2)the product of $0.10 multiplied by the number of subscribers per month to which carriage is provided under such agreement.(b)

Maximum credit

The credit determined under this section with respect to any eligible distributor for any taxable year shall not exceed the product of—(1)$0.10, multiplied by(2)3 times the average number of subscribers of the eligible distributor on days during such taxable year.(c)

Definitions and special rules

For purposes of this section—(1)

Eligible distributor

The term eligible distributor means—(A)any person engaged in the trade or business of being a qualified distributor or multichannel video programming distributor, as such term is defined in section 76.1000 of title 47 of the Code of Federal Regulations, and(B)any person engaged in the trade or business of being a virtual multichannel video programming distributor.(2)

Agreement for qualifying carriage

The term agreement for qualifying carriage means a written agreement between an eligible distributor and a qualified independent programmer that provides for new or expanded carriage of a qualified independent programmer to at least 40 percent of a subscriber base and which requires the eligible distributor to pay a license fee to the qualified independent programmer.(3)

Qualified independent programmer

The term qualified independent programmer—(A)means a United States-based person engaged in the production, creation, or wholesale distribution of three or fewer television channels in which no multichannel video programming distributor, cable programmer, or broadcast network has attributable interest, as such term is defined by section 1000(b) of title 47 of the Code of Federal Regulations, and(B)includes rural, women, socially disadvantaged, and minority-owned programmers.(4)

Cable programmer

The term cable programmer means WarnerMedia LLC, The Walt Disney Company, News Corporation, CBSViacom, Inc., Discovery, Inc., Comcast and their managed or controlled subsidiaries, successors, and assigns.(5)

License fees

Except as otherwise provided by the Secretary, in the case of an agreement for qualifying carriage which is net effective rate positive for the qualified independent programmer, the appropriate amount shall be treated as a license fee paid by the eligible distributor to the qualified independent programmer.(6)

Socially disadvantaged

The term socially disadvantaged with respect to an individual means that the individual 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.(d)

Denial of double benefit

No deduction shall be allowed under this chapter for any amount to the extent that such amount is allowed as a credit under this section.

(b)

Credit made part of general business credit

Subsection (b) of section 38 of such Code is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting , plus, and by adding at the end the following new paragraph:

(34)the carriage of independent programmers credit determined under section 45U.

(c)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

Sec. 45U. Carriage of Independent Programmers Credit.

(d)

Effective date

The amendments made by this section shall apply to expenses made or incurred after December 31, 2020, in taxable years ending after such date.