Section 1 Short title
This Act may be cited as the “Expanding Broadcast Ownership Opportunities Act of 2019”.
Expanding Broadcast Ownership Opportunities Act of 2019
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.
Sec. 2 Definitions
In this Act:
Broadcast station— The term broadcast station has the meaning given the term in section 3 of the Communications Act of 1934 (47 U.S.C. 153).
Commission— The term Commission means the Federal Communications Commission.
Owned by socially disadvantaged individuals— The term owned by socially disadvantaged individuals has the meaning given the term in section 344(a) of the Communications Act of 1934, as added by section 5(a)(1) of this Act.
Sec. 3 Findings
Congress finds the following:
One of the main missions of the Commission, and a compelling governmental interest, is to ensure that there is a diversity of ownership and viewpoints in the broadcasting industry.
The Commission should continue to collect relevant data and conduct studies on the diversity described in paragraph (1) and make appropriate recommendations to Congress on how to increase the number of minority- and women-owned broadcast stations.
Data from 2014 shows that, of the more than 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 those stations.
Women and minority ownership is 5 to 10 times higher in other industries than in the broadcasting industry.
During the 17-year period between 1978 and 1995, when a minority tax certificate program was in place at the Commission, the Commission issued to minorities 287 certificates for radio stations and 40 certificates for television stations.
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. 4 FCC reports to Congress
Biennial report containing recommendations for increasing number of minority- and women-Owned broadcast stations— Not later than 180 days after the date of enactment of this Act, and not less frequently than once 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.
Biennial report on number of minority- and women-Owned broadcast stations— Not later than 180 days after the date of enactment of this Act, and not less frequently than once every 2 years thereafter, the Commission shall submit to Congress a report that identifies 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 of the Commission.
Sec. 5 Tax certificate program for broadcast station transactions furthering ownership by socially disadvantaged individuals
Requirements for issuance of certificate by FCC—
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:
“344. Tax certificate program for broadcast station transactions furthering ownership by socially disadvantaged individuals
“(a) 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) the station is at least 51 percent owned by 1 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 1 or more socially disadvantaged individuals; and
“(B) the management and daily business operations of the station are controlled by 1 or more socially disadvantaged individuals.
“(2) Socially disadvantaged individual—The term socially disadvantaged individual means—
“(A) a woman; or
“(B) 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.
“(b) Issuance of certificate by Commission—Subject to the rules adopted by the Commission under subsection (d), upon application by a person that engages in a sale described in subsection (c), the Commission shall issue to that person a certificate stating that the sale meets the requirements of this section.
“(c) Sales described—A sale described in this subsection is either of the following:
“(1) A sale of an interest in a broadcast station that results in the station being owned by socially disadvantaged individuals.
“(2) In the case of a person that has contributed capital in exchange for an interest in a broadcast station that is owned by socially disadvantaged individuals, a sale by that person of some or all of that interest.
“(d) Rules—The Commission shall adopt rules for the issuance of a certificate under subsection (b) that provide for the following:
“(1) A limit on the value of an interest the sale of which qualifies for the issuance of such a certificate, which shall be not less than $10,000,000 and not greater than $50,000,000.
“(2) In the case of a sale described in subsection (c)(1), a minimum period of not longer than 3 years after the sale during which the broadcast station shall remain owned by socially disadvantaged individuals.
“(3) 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 (b).
“(4) Requirements for participation by socially disadvantaged individuals in the management of the broadcast station.
“(e) Annual report to Congress—The Commission shall submit to Congress an annual report describing the sales for which certificates have been issued under subsection (b) during the period covered by the report.”
Deadline for issuance of rules— Not later than 1 year after the date of enactment of this Act, the Commission shall issue rules to implement section 344 of the Communications Act of 1934, as added by paragraph (1).
Report to Congress on program expansion— Not later than 6 years after the date of 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.
Examination and report to Congress on nexus between diversity of ownership and diversity of viewpoint—
Examination— Not later than 60 days after the date of 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.
Report to Congress— Not later than 2 years after the date of 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.
Nonrecognition of gain or loss for tax purposes—
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:
“V Sale of interest in certain broadcast stations.
“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),
“(c) Basis—For basis of property acquired on a sale treated as an involuntary conversion under subsection (a), see section 1033(b).”
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:
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 enactment of this Act.
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 enactment of this Act.
Sec. 6 Incubator program
Not later than 180 days after the date of 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:
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.
Expand the eligibility criteria for an incubated entity under such program to include broadcast stations owned by socially disadvantaged individuals.