[Congressional Record Volume 149, Number 96 (Thursday, June 26, 2003)]
[Extensions of Remarks]
[Page E1357]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1357]]


            TAX INCENTIVES FOR TELECOMMUNICATIONS BUSINESSES

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                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                        Wednesday, June 25, 2003

  Mr. RANGEL. Mr. Speaker, today I am introducing legislation to 
provide tax incentives to encourage greater diversity of ownership in 
telecommunications businesses. My bill is a response to the increasing 
ownership of television and radio properties by large media companies.
  I strongly believe that promoting a diversity of views on the 
airwaves is an important public policy goal. The only way to accomplish 
that goal is to broaden the ownership of broadcast stations. The 
television and radio spectrum is a limited resource. The trend in 
recent years has been a greater concentration of ownership of that 
resource by the large media companies. We need to reverse that trend.
  Mr. Speaker, small businesses that wish to enter telecommunications 
businesses face significant barriers. To enter a broadcast business, a 
small business must purchase an existing property. Owners of those 
properties find it much easier to sell to large businesses than to 
small businesses. Therefore, small businesses quite often do not have a 
seat at the table when there are negotiations over the sale of 
broadcast properties.
  My bill would attempt to reduce those barriers by providing limited 
deferral of capital gain taxation when a telecommunications property is 
sold to a small business. It would provide the sellers of those 
properties a positive incentive to consider a small business purchaser.
  Large segments of our society historically have been underrepresented 
in the ownership of radio and television properties. I believe that it 
is vital that those groups have access to the television and radio 
spectrum so that their views may be represented on our airwaves. 
Therefore, my bill would provide a larger deferral of capital gain 
taxation when the sale is to a small business owned and controlled by 
individuals from these historically underrepresented groups.

  Mr. Speaker, I understand that some may attack my bill as being the 
re-enactment of a flawed prior program. The provisions in my bill are 
quite similar to the tax certificate program that was repealed by the 
Congress in 1995. I do not quarrel with those who assert that there 
were abuses in that program. However, it is unfortunate that the 
Congress chose repeal and not reform because that program had been 
effective in accomplishing its goal of expanding ownership of radio and 
television businesses. In 1978, before the implementation of that 
program, only .05 percent of all broadcast stations in this country 
were owned by minority groups. By 1994, the year before the program was 
repealed, the program had succeeded in increasing minority ownership 
sixty-fold to 3 percent. Since that program was repealed, the number of 
minority-owned broadcast properties has declined.
  The bill that I am introducing today contains provisions specifically 
designed to address the abuses in the prior program. It is limited to 
small business purchasers, it contains restrictions on the number of 
purchases that can be made by any one business, it contains recapture 
provisions to prevent the use of the small business as a front for 
another party, and it contains provisions designed to prevent avoidance 
of the ownership requirements through options or other sophisticated 
transactions.
  I am hopeful that we can avoid the emotionally charged rhetoric that 
occurred in 1995 when this issue was last considered. All small 
businesses, regardless of their ownership, would be eligible for the 
benefits of my bill. It is true that the bill provides a slightly 
larger incentive when the small business purchaser is owned and 
controlled by individuals who are from segments in our society 
historically underrepresented in ownership of broadcast businesses. I 
believe this incentive is appropriate so that the views of those groups 
are heard on our Nation's airwaves. The bill simply attempts to ensure 
that small businesses, including minority owned small businesses, have 
a seat at the table when a broadcast property is being sold.
  Mr. Speaker, I am hopeful that we will be able to deal with this 
issue on a bipartisan basis. We should all support the goal of 
expanding diversity in ownership of broadcast properties. I am pleased 
that in the past Senator McCain introduced a similar proposal in the 
Senate. I am hopeful that we can find bipartisan support in the House. 
Following is a brief description of the provisions of the bill.

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