I

104TH CONGRESS

2D SESSION H. R. 2979

To ensure the financial self-sufficiency of public broadcasting, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 28, 1996

Mr. FIELDS of Texas (for himself, Mr. PORTER, Mr. OXLEY, Mr. MOORHEAD,

Mr. SCHAEFER, Mr. BARTON of Texas, Mr. HASTERT, Mr. GILLMOR, and

Mr. FRISA) introduced the following bill; which was referred to the Committee on Commerce

A BILL

To ensure the financial self-sufficiency of public

broadcasting, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Public Broadcasting

5 Self-Sufficiency Act of 1996’’.
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1 TITLE I—TRANSITION FROM

2 FEDERAL FUNDING

3 Subtitle A—Public Broadcasting

4 Station Opportunities

5 SEC. 101. DEFINITIONS.

6 Section 397 of the Communications Act of 1934 (47

7 U.S.C. 397) is amended by adding at the end the following

8 new paragraph:

9 ‘‘(18) The term ‘transition period’ means the

10 period beginning on the date of enactment of the

11 Public Broadcasting Self-Sufficiency Act of 1996

12 and ending at the close of September 30, 2000.’’.

13 SEC. 102. EXPANDED UNDERWRITING OPPORTUNITIES.

14 Section 399B(b) of the Communications Act of 1934

15 (47 U.S.C. 399b) is amended by adding at the end thereof

16 the following new paragraph:

17 ‘‘(3) Paragraph (2) shall not prohibit a public broad18 cast station from broadcasting or accepting remuneration

19 for broadcasting—

20 ‘‘(A) well-established corporate logos or slogans,

21 even if such logos or slogans include a call to action

22 by the viewer or listener; or

23 ‘‘(B) strictly quantifiable comparative descrip24 tions of products, services, or providers of products

25 or services.’’.
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1 SEC. 103. PUBLIC/COMMERCIAL PARTNERSHIPS.

2 Section 399(b) of the Communications Act of 1934

3 is further amended by adding at the end the following new

4 paragraph:

5 ‘‘(4) A noncommercial educational broadcast station

6 may broadcast programs produced by, or at the expense

7 of, or furnished by persons other than the licensee, and

8 may receive compensation (in addition to costs incidental

9 to production and broadcasting) for broadcasting such

10 programs.’’.

11 SEC. 104. CONVERSION OF STATIONS TO COMMERCIAL STA12 TUS.

13 Subpart E of part IV of title III of the Communica14 tions Act of 1934 is amended by adding at the end the

15 following new section:

16 ‘‘SEC. ø399D.¿ TELEVISION CHANNEL EXCHANGES.

17 ‘‘(a) PETITION.—The licensees or permittees of a

18 commercial and a public broadcast television station may

19 jointly petition the Commission to request an exchange of

20 channels (including public broadcast television stations on

21 VHF channels to be exchanged for UHF channels). The

22 Commission shall, within 90 days after receipt of such a

23 petition, amend the television table of allotments and mod24 ify the licenses (or permits) of the petitioners to specify

25 operation on the appropriately exchanged channels upon

26 finding that—
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1 ‘‘(1) the stations serve substantially the same

2 market; and

3 ‘‘(2) the consideration to be paid to the public

4 broadcast television licensee or permittee—

5 ‘‘(A) will be dedicated to the provision of

6 public telecommunications services; and

7 ‘‘(B) fairly reflects the value of the ex8 change of channels and related facilities.

9 ‘‘(b) OTHER CONSIDERATIONS PROHIBITED.—In

10 acting on the joint petition, the Commission may not con11 sider proposals by other parties to become licensees or per12 mittees on the channels to be exchanged.’’.

13 SEC. 105. REMUNERATIVE USES OF OVERLAPPING STA14 TIONS.

15 Subpart E of part IV of title III of the Communica16 tions Act of 1934 is further amended by inserting after

17 section 399D (as added by section 104 of this Act) the

18 following new section:

19 ‘‘SEC. ø399E.¿ REMUNERATIVE USES OF OVERLAPPING STA20 TIONS.

21 ‘‘(a) REMUNERATIVE USES.—

22 ‘‘(1) AUTHORITY TO OPERATE FOR REMUNERA23 TIVE PURPOSES.—Subject to the requirements and

24 limitations of this section, the licensee or licensees of

25 2 overlapping stations may, notwithstanding the al-
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1 located and licensed status of such stations as non2 commercial educational television stations, operate

3 one such station for remunerative purposes, includ4 ing the transmission of commercial television pro5 gramming originated by such licensee or by another

6 party and transmission of subscription television or

7 pay-per-view services.

8 ‘‘(2) CONDITIONS FOR REMUNERATIVE USE.—

9 The licensee or licensees of overlapping stations in10 tending to operate one of such stations for remu11 nerative purposes pursuant to paragraph (1) shall

12 file with the Commission a joint operating agree13 ment or other instrument providing assurances

14 that—

15 ‘‘(A) the remuneration from such oper16 ations (in excess of the costs of the commercial

17 and public television operations of such station)

18 is dedicated to the provision of local public tele19 communications services on the other overlap20 ping station to substantially the same market;

21 and

22 ‘‘(B) the station operated for remunerative

23 purposes is, but for the remunerative oper24 ations, otherwise operated consistent with the

25 provisions of this Act and the rules and policies
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1 of the Commission applicable to such oper2 ations.

3 ‘‘(3) INELIGIBILITY FOR GRANTS.—No non4 commercial educational television station operating

5 under an agreement or instrument filed under para6 graph (2) shall be eligible to receive any grant from

7 funds appropriated pursuant to section 396.

8 ‘‘(b) SALE OF OVERLAPPING STATION.—

9 ‘‘(1) SALE PERMITTED.—Upon application by

10 the licensee of 2 or more overlapping public tele11 vision stations, the Commission shall approve the as12 signment of one of the licenses of such licensee for

13 a television station to another person or entity, and

14 shall permit such person or entity to operate such

15 station as a commercial television station, if—

16 ‘‘(A) the licensee assigning such license

17 will dedicate all compensation received for such

18 assignment to the support of the local public

19 telecommunications services on the retained sta20 tion; and

21 ‘‘(B) the compensation provided to the li22 censee for assigning such license fairly reflects

23 the value of the license and related facilities.

24 ‘‘(2) INELIGIBILITY FOR GRANTS.—No public

25 television station operated by the licensee making an
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1 assignment of a license under paragraph (1) shall be

2 eligible to receive a grant from funds appropriated

3 pursuant to section 396.

4 ‘‘(c) DEFINITIONS.—For purposes of this section:

5 ‘‘(1) OVERLAPPING STATION.—Two public tele6 vision stations are ‘overlapping stations’ if the Grade

7 A contour of one of such stations reaches more than

8 50 percent of the Grade A contour of the other such

9 station in the same television market.

10 ‘‘(2) TELEVISION MARKET.—The term ‘tele11 vision market’ has the meaning provided in section

12 76.55(e)(1) of the Commission’s rules (47 C.F.R.

13 76.55(e)(1)).’’.

14 Subtitle B—Corporation for Public

15 Broadcasting Financial Flexibility

16 SEC. 121. RELAXATION AND REDUCTION OF STATUTORY

17 MANDATES.

18 (a) PURPOSES.—Subsection (a) of section 396 of the

19 Communications Act of 1934 (47 U.S.C. 396(a)) is

20 amended to read as follows:

21 ‘‘(a) PURPOSES.—The purposes of the Corporation

22 for Public Broadcasting shall be—

23 ‘‘(1) to promote the delivery of local public tele24 communications services which advance education,
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1 support culture, and foster citizenship for all Ameri2 cans;

3 ‘‘(2) to promote efficiency and effectiveness in

4 the provision of public broadcasting services,

5 through technological advances and, where appro6 priate, through mergers, consolidations, and joint

7 operating agreements;

8 ‘‘(3) to promote and support program produc9 tion;

10 ‘‘(4) to preserve and enhance the geographic

11 and cultural diversity of public broadcasting pro12 grams and services;

13 ‘‘(5) to support public broadcasting services for

14 rural and underserved areas and audiences;

15 ‘‘(6) to create and deliver creative and diverse

16 programming and services of high quality and excel17 lence;

18 ‘‘(7) to preserve and protect their editorial in19 tegrity and independence; and

20 ‘‘(8) to pioneer new telecommunications tech21 nologies and to adapt those technologies for edu22 cational and public service purposes.’’.

23 (b) AUTHORIZED ACTIVITIES.—Subsection (g) of

24 such section is amended to read as follows:
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1 ‘‘(g) The Corporation is authorized to take such ac2 tions consistent with the District of Columbia Nonprofit

3 Corporation Act (D.C. Code, sec. 29–1001 et seq.) as it

4 may, in the exercise of its business judgment, determine

5 to be necessary to carry out the purposes set forth in sub6 section (a) of this section. To carry out such purposes and

7 to take such actions, the Corporation shall have the usual

8 powers conferred on a nonprofit corporation by such

9 Act.’’.

10 (c) FINANCING.—

11 (1) AUTHORIZATION OF APPROPRIATIONS.—

12 Section 396(k)(1) of the Communications Act of

13 1934 (47 U.S.C. 396(k)(1)) is amended—

14 (A) by striking subparagraph (B) and in15 serting the following:

16 ‘‘(B) There are authorized to be appropriated to the

17 Fund $250,000,000 for each of the fiscal years 1998,

18 1999, and 2000.’’;

19 (B) by striking subparagraphs (C) and

20 (E);

21 (C) by redesignating subparagraph (D) as

22 subparagraph (C); and

23 (D) by inserting after such subparagraph

24 (C) the following new subparagraph:
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1 ‘‘(D) The Secretary of the Treasury shall make the

2 appropriated funds under this subsection available on a

3 fiscal year basis.’’.

4 (d) ALLOCATION OF APPROPRIATIONS.—Section

5 396(k) of such Act is further amended by striking para6 graphs (2) through (10) and inserting the following:

7 ‘‘(2) BUDGET FOR ALLOCATION.—During the

8 transition period, the Corporation shall establish an

9 annual budget for use in allocating amounts from

10 the Fund. Of the amounts appropriated into the

11 Fund available for allocation for any fiscal year dur12 ing the transition period—

13 ‘‘(A) not more than 5 percent of all the

14 amounts appropriated into the Fund available

15 for allocation for any fiscal year shall be avail16 able for administrative expenses;

17 ‘‘(B) 75 percent of the remainder (after al18 locations are made under subparagraph (A)

19 shall be allocated in direct grants to public tele20 vision stations for the provision of public tele21 vision broadcasting; and

22 ‘‘(C) 25 percent of such remainder shall be

23 allocated in direct grants to public radio sta24 tions for the provision of public radio broad25 casting.
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1 ‘‘(3) CONDITIONS ON ALLOCATIONS PER2 MITTED.—The Corporation shall have the authority

3 to establish requirements, guidelines, and limitations

4 with respect to the use of Federal funds by public

5 broadcasting stations.

6 ‘‘(4) PUBLIC ACCOUNTABILITY OF RECIPI7 ENTS.—During the transition period, funds may not

8 be distributed pursuant to this subsection to the

9 Public Broadcasting Service or National Public

10 Radio (or any successor organization), or to the li11 censee or permittee of any public broadcast station,

12 unless the governing body of any such organization,

13 any committee of such governing body, or any advi14 sory body of any such organization, holds open meet15 ings preceded by reasonable notice to the public. All

16 persons shall be permitted to attend any meeting of

17 the board, or of any such committee or body, and no

18 person shall be required, as a condition to attend19 ance at any such meeting, to register such person’s

20 name or to provide any other information. Nothing

21 contained in this paragraph shall be construed to

22 prevent any such board, committee, or body from

23 holding closed sessions to consider matters relating

24 to individual employees, proprietary information, liti25 gation and other matters requiring the confidential
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1 advice of counsel, commercial or financial informa2 tion obtained from a person on a privileged or con3 fidential basis, or the purchase of property or serv4 ices whenever the premature exposure of such pur5 chase would compromise the business interests of

6 any such organization. If any such meeting is closed

7 pursuant to the provisions of this paragraph, the or8 ganization involved shall thereafter (within a reason9 able period of time) make available to the public a

10 written statement containing an explanation of the

11 reasons for closing the meeting.

12 ‘‘(5) PUBLIC ACCESS TO REPORTS.—During the

13 transition period, funds may not be distributed pur14 suant to this subsection to any public telecommuni15 cations entity that does not maintain for public ex16 amination copies of the annual financial and audit

17 reports, or other information regarding finances,

18 submitted to the Corporation.

19 ‘‘(6) ONE-STATION-TO-A-MARKET SUPPORT.—

20 During the transition period, the Corporation shall

21 ensure that—

22 ‘‘(A) in communities in which there is a

23 substantial overlap in the service areas of public

24 television stations, the total funds made avail25 able to those stations are not more than would
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1 be provided if such areas were served by a sin2 gle station; and

3 ‘‘(B) in communities in which there is a

4 substantial overlap in the service areas of public

5 radio station, the total funds made available to

6 those stations are not more than would be pro7 vided if such areas were served by a single sta8 tion, unless such stations serve significantly dif9 ferent listening audiences, using distinct for10 mats and providing a high proportion of locally

11 originated programming.

12 ‘‘(7) RATES OF PAY.—During the transition pe13 riod, funds may not be distributed pursuant to this

14 subsection to the Public Broadcasting Service or Na15 tional Public Radio (or any successor organization)

16 unless assurances are provided to the Corporation

17 that no officer or employee of the Public Broadcast18 ing Service or National Public Radio (or any succes19 sor organization), as the case may be, will be com20 pensated at an annual rate of pay which exceeds the

21 rate of basic pay in effect from time to time for level

22 I of the Executive Schedule under section 5312 of

23 title 5, United States Code, and unless further as24 surances are provided to the Corporation that no of-
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1 ficer or employee of such an entity will be loaned

2 money by that entity on an interest-free basis.

3 ‘‘(8) SATELLITE INTERCONNECTION FUND.—

4 ‘‘(A) There is hereby established in the

5 Treasury a fund which shall be known as the

6 Public Broadcasting Satellite Interconnection

7 Fund (hereinafter in this subsection referred to

8 as the ‘Satellite Interconnection Fund’), to be

9 administered by the Secretary of the Treasury.

10 ‘‘(B) By December 31, 1996, the Public

11 Broadcasting Service and National Public

12 Radio shall prepare a final report for Congress

13 on the status of the Satellite Interconnection

14 Fund.

15 ‘‘(9) POST-TRANSITION DISCRETION.—The pro16 visions of this subsection shall cease to be effective

17 upon the expiration of the transition period. There18 after, the Corporation may make funding and fi19 nancing decisions, and place requirements on licens20 ees, permittees and other public broadcasting enti21 ties, in the exercise of its business judgment in con22 sultation with public television and radio licensees.’’.
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1 TITLE II—PRIVATIZATION OF

2 THE CORPORATION FOR PUB3 LIC BROADCASTING

4 SEC. 201. CONVERSION OF CORPORATION.

5 (a) CONVERSION OF BOARD TO PRIVATE APPOINT6 MENT PROCEDURES.—Section 396(c) of the Communica7 tions Act of 1934 is amended to read as follows:

8 ‘‘Board of Directors

9 ‘‘(c)(1) The Corporation for Public Broadcasting

10 shall have a Board of Directors (hereinafter in this section

11 referred to as the ‘Board’). Until the expiration of the

12 transition period, the Board shall consist of 9 members

13 appointed by the President, no more than 6 of whom may

14 be members of the same political party.

15 ‘‘(2) Members of the Board appointed after the date

16 of enactment of the Public Broadcasting Self-Sufficiency

17 Act shall be selected by the President from a list of can18 didates nominated by the selection committee convened

19 under paragraph (3). The President may request the selec20 tion committee to nominate additional candidates. Such

21 candidates shall be selected by the selection committee and

22 the President on the basis of their qualifications and ex23 pertise in one or more of the following fields:

24 ‘‘(A) Investment management.

25 ‘‘(B) Corporate finance.
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1 ‘‘(C) Telecommunications.

2 ‘‘(D) Education.

3 ‘‘(E) Public broadcasting.

4 ‘‘(3) Upon the occurrence of any vacancy in the

5 Board prior to the expiration of the transition period, a

6 selection committee is established to nominate candidates

7 for such vacancy. The selection committee shall be com8 posed of the majority and minority leaders of the Senate

9 and the Speaker and minority leader of the House of Rep10 resentatives. The selection committee shall consult with

11 representatives of public broadcast station licensee prior

12 to nominating any candidates.

13 ‘‘(4) After the expiration of the transition period,

14 members of the Board shall be appointed in accordance

15 with the bylaws of the Corporation. The terms of all mem16 bers appointed pursuant to this subsection shall expire

17 upon the expiration of the transition period, except as oth18 erwise provided in such bylaws as in effect on that date.

19 ‘‘(5) Any vacancy in the Board shall not affect its

20 power.’’.

21 (e) TERMINATION OF PROVISIONS.—Section 396 of

22 such Act is further amended by adding at the end the fol23 lowing new subsection:
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1 ‘‘Termination of Provisions

2 ‘‘(n) Effective at the end of the transition period, the

3 following provisions of this section shall cease to be effec4 tive: subsections (d), (e), (h), (i), (l), and (m).

5 SEC. 202. ESTABLISHMENT OF TRUST FOR PUBLIC BROAD6 CASTING.

7 (a) ESTABLISHMENT.—Subpart D of part IV of title

8 III of the Communications Act of 1934 is amended by in9 serting after section 396 (47 U.S.C. 396) the following

10 new section:

11 ‘‘SEC. 396A. TRUST FOR PUBLIC BROADCASTING.

12 ‘‘(a) PURPOSE.—It is the purpose of this section—

13 ‘‘(1) to provide for the establishment of a trust

14 fund by the Corporation to provide ongoing support

15 for public broadcasting after the cessation of annual

16 appropriations under section 396(k);

17 ‘‘(2) to prohibit expenditures from the corpus of

18 such trust fund; and

19 ‘‘(3) to authorize the appropriations to the

20 trust fund of the proceeds of certain competitive bid21 ding procedures, to form the corpus of the trust

22 fund.

23 ‘‘(b) REQUIREMENTS.—The Corporation shall, in ac24 cordance with the laws of the District of Columbia, estab25 lish a trust fund for the investment and management of
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1 funds made available under this section. The instruments

2 governing such trust fund shall provide—

3 ‘‘(1) that no part of the trust fund corpus may

4 be expended for the operations of the Corporation or

5 otherwise in furtherance of the purposes of the Cor6 poration;

7 ‘‘(2) such trust fund corpus shall be invested in

8 such manner as the Board of the Corporation deter9 mines to be reasonable and prudent; and

10 ‘‘(3) the trust fund income shall be available in

11 accordance with the bylaws of the Corporation—

12 ‘‘(A) to carry out the purposes of section

13 396;

14 ‘‘(B) to pay the operational and adminis15 trative expenses of the Corporation;

16 ‘‘(C) to pay for public broadcasting system

17 support; and

18 ‘‘(D) to provide direct grants to public

19 broadcasting stations.

20 ‘‘(c) ALLOCATION REQUIREMENTS.—

21 ‘‘(1) ONE-STATION-TO-A-MARKET SUPPORT.—

22 The Corporation shall ensure that—

23 ‘‘(A) in communities in which there is a

24 substantial overlap in the service areas of public

25 television stations, the total funds made avail-
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1 able through direct grants to those stations are

2 not more than would be provided if such areas

3 were served by a single station; and

4 ‘‘(B) in communities in which there is a

5 substantial overlap in the service areas of public

6 radio station, the total funds made available

7 through direct grants to those stations are not

8 more than would be provided if such areas were

9 served by a single station, unless such stations

10 serve significantly different listening audiences,

11 using distinct formats and providing a high pro12 portion of locally originated programming.

13 ‘‘(2) USE TO SUPPORT PROGRAM PRODUC14 TION.—The Corporation may expend up to 25 per15 cent of the income from trust for television and

16 radio program production.

17 ‘‘(d) AUTHORITY TO AUCTION VACANT RESERVED

18 CHANNELS.—

19 ‘‘(1) COMMISSION ACTION REQUIRED.—The

20 Commission shall allocate by means of competitive

21 bidding under section 309(j) the initial licenses and

22 construction permits for the use of such portions of

23 the electromagnetic spectrum as are, on the date of

24 the enactment of the Public Broadcasting Self-Suffi25 ciency Act, reserved for noncommercial education
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1 television stations and as to which no application

2 has been accepted for filing by the Commission by

3 such date. In addition, the Commission shall allocate

4 by such means licenses and permits for stations re5 linquished under paragraph (5).

6 ‘‘(2) BIDDING REQUIREMENTS.—The competi7 tive bidding required by paragraph (1) shall be com8 pleted not later than January 1, 1999. In conduct9 ing such competitive bidding, the Commission—

10 ‘‘(A) shall, notwithstanding section

11 309(j)(4)(A), require lump sum payment of all

12 bids;

13 ‘‘(B) shall, notwithstanding section

14 309(j)(4)(D), not prescribe regulations granting

15 bidding preferences that would reduce receipts

16 from the competitive bidding required by para17 graph (1) of this subsection;

18 ‘‘(C) shall, prior to conducting such com19 petitive, make such adjustments to the commu20 nities of license of the stations to be allocated

21 as necessary, consistent with the avoidance of

22 harmful interference, to recover for the public

23 the full value of the spectrum resource being

24 made available; and
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1 ‘‘(D) shall allocate to winning bidders the

2 same rights to obtain an allocation of spectrum

3 for the provision of advanced television services

4 as is available to any incumbent television

5 broadcast station licensee.

6 ‘‘(3) USE OF PROCEEDS; BIDDING CONTINGENT

7 ON APPROPRIATIONS.—The proceeds of any competi8 tive bidding conducted pursuant to this subsection,

9 not to exceed $1,000,000,000, are authorized to be

10 appropriated to the trust fund established by the

11 Corporation under this section. No competitive bid12 ding may be conducted with respect to the portions

13 of the electromagnetic spectrum described in para14 graph (1) unless the proceeds of such bidding are

15 appropriated to such trust fund.

16 ‘‘(4) USE OF SPECTRUM.—The Commission

17 shall award commercial television broadcast licenses

18 to persons or entities that are successful bidders in

19 the competitive bidding required by paragraph (1).

20 ‘‘(5) AUTHORITY TO COMPENSATE RELINQUISH21 ING LICENSEES.—The Commission may enter into

22 agreements with public broadcasting entities for the

23 purpose of making available additional stations for

24 allocation by competitive bidding under paragraph

25 (1). Such agreements may provide that a public
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1 broadcasting entity that agrees to relinquish its sta2 tion license may obtain 50 percent of the proceeds

3 of the competitive bidding for the spectrum pre4 viously allocated to that station. Any such agreement

5 shall provide that any amounts provided to such en6 tity under this paragraph shall be used to support

7 public broadcasting or education.

8 ‘‘(e) COMPLIANCE VERIFICATION.—Before making

9 any funds appropriated under subsection (d)(3) available

10 to the Corporation, the Secretary of the Treasury—

11 ‘‘(1) shall verify that the Corporation has estab12 lished the trust fund in accordance with the require13 ments of this section;

14 ‘‘(2) shall require the Corporation to agree that,

15 in the event of a substantial failure by the Corpora16 tion to carry out the purposes of section 396, the

17 corpus of the trust fund shall revert to the United

18 States;

19 ‘‘(3) shall verify that the Corporation has

20 amended its bylaws to provide for the prudent ad21 ministration of the trust fund by the Corporation

22 after the expiration of the transition period; and

23 ‘‘(4) may require such other information or

24 agreements as may be necessary to protect the Fed25 eral fiscal interest.
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1 ‘‘(f) ANNUAL REPORT.—The Corporation shall sub2 mit to the Congress an annual statement on the financial

3 condition of the trust fund.’’.

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