Expanding Broadcast Opportunities Act of 2019 Passes House Commerce Committee – On to Floor for a Vote

Last week the House Energy and Commerce Committee passed H.R. 3957, the Expanding Broadcast Opportunities Act of 2019.   The legislation was sponsored by Congressman G.K. Butterfield (D. NC).  New York Representatives Yvette Clarke, Adriano Espaillat, Grace Meng, Paul Tonko and Nydia Velazquez co-sponsored the legislation

The bill essentially reinstates the FCC’s tax certificate policy, which was eliminated more than a decade ago. Under the new bill stations selling to minority owned buyers would receive a tax certificate i.e., a tax break in the form of a deferral on capital gains.  The tax certificate creates an economic incentive to sell to minority buyers.  Minority buyers would be required to maintain control of the station for at least three years.  Moreover the tax certificate would be available to all “socially disadvantaged” individuals.

The tax certificate policy was the only minority ownership policy that worked to increase the number of minority broadcast owners.  The program however was dropped by the FCC in light of Supreme Court rulings questioning the constitutionality of such programs.  There were also concerns regarding those who used the program to obtain the tax certificate and then simply flip the station to a non-minority owner.

The current bill tries to resolve the constitutional issue by making the tax certificate available to a station owner that sells to a “socially disadvantaged” individual.  In addition, the three year holding period show resolve issues regarding abuse from “flipping” the station.

In a related matter, former Commerce Committee Chairman Greg Walden (R. OR) offered an amendment to the bill that would reinstate the FCC’s minority incubator program.  Under Walden’s amendment, stations participating in an incubator program would have become eligible for a waiver of the FCC’s local ownership rules.  The amendment was voted down.  Many Democrats on the committee believe that waiving the ownership rules would undermine incentives to sell to new minority owners.

To see a copy of H.R. 3597 click HERE.

 

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