II

106TH CONGRESS

2D SESSION S. 3229

To amend the Internal Revenue Code of 1986 to allow a tax credit for

the cost of certain equipment used to convert public television broadcasting from analog to digital transmission.

IN THE SENATE OF THE UNITED STATES

OCTOBER 24 (legislative day, SEPTEMBER 22), 2000

Mr. KERREY introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow a

tax credit for the cost of certain equipment used to

convert public television broadcasting from analog to digital transmission.

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

3 SECTION 1. TAX CREDIT FOR PUBLIC TELEVISION DIGITAL

4 TRANSMISSION CONVERSIONS.

5 (a) IN GENERAL.—Subpart B of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to general business credits) is amended by

8 adding at the end the following:
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1 ‘‘SEC. 45D. CREDIT FOR PUBLIC TELEVISION DIGITAL

2 TRANSMISSION CONVERSIONS.

3 ‘‘(a) IN GENERAL.—For purposes of section 38, the

4 amount of the public television digital transmission con5 version credit determined under this section for an eligible

6 taxpayer for each taxable year in the credit period with

7 respect to an eligible public television conversion project

shall be an amount equal to 1 8 ⁄6 of the qualified conversion

9 equipment costs in connection with such project.

10 ‘‘(b) ELIGIBLE TAXPAYER; ELIGIBLE PUBLIC TELE11 VISION CONVERSION PROJECT.—For purposes of this

12 section—

13 ‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible

14 taxpayer’ means any limited partnership or limited

15 liability company—

16 ‘‘(A) the sole purpose of which is to ac17 quire qualified conversion equipment for lease

18 at nominal rent payments to a public tele19 communications entity in connection with 1 or

20 more eligible public television conversion

21 projects,

22 ‘‘(B) the general partner, general partners,

23 or managers of which consist solely of 1 or

24 more qualified public broadcasting organiza25 tions, and
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1 ‘‘(C) which makes an irrevocable election

2 (binding on the eligible taxpayer and all succes3 sors in interest as lessor under the qualified

4 conversion equipment lease) not to claim depre5 ciation with respect to such qualified conversion

6 equipment.

7 ‘‘(2) ELIGIBLE PUBLIC TELEVISION CONVER8 SION PROJECT.—The term ‘eligible public television

9 conversion project’ means any project to convert the

10 television broadcasting of a public telecommuni11 cations entity from analog to digital transmission.

12 ‘‘(c) QUALIFIED CONVERSION EQUIPMENT COSTS.—

13 For purposes of this section—

14 ‘‘(1) IN GENERAL.—The term ‘qualified conver15 sion equipment costs’ for a taxable year means the

16 aggregate fair market value of qualified conversion

17 equipment acquired or constructed by an eligible

18 taxpayer at the direction of, and in full compliance

19 with such bidding requirements as may be applicable

20 to, a qualified public broadcasting organization.

21 ‘‘(2) QUALIFIED CONVERSION EQUIPMENT.—

22 The term ‘qualified conversion equipment’ means

23 property used by a qualified public broadcasting or24 ganization under a lease with nominal rent payments
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1 with an eligible taxpayer in an eligible public tele2 vision conversion project, including—

3 ‘‘(A) transmission towers,

4 ‘‘(B) transmission equipment,

5 ‘‘(C) production equipment, including cam6 eras, recorders, software and editing systems,

7 ‘‘(D) retransmission equipment,

8 ‘‘(E) transformers, and

9 ‘‘(F) such other property (other than land)

10 necessarily related to the property described in

11 subparagraphs (A) through (E) or used for the

12 repair or maintenance of such property.

13 ‘‘(d) OTHER DEFINITIONS.—For purposes of this

14 section—

15 ‘‘(1) PUBLIC TELECOMMUNICATIONS ENTITY.—

16 The term ‘public telecommunications entity’ has the

17 meaning given such term by section 397(12) of the

18 Communications Act of 1934 (47 U.S.C. 397(12)).

19 ‘‘(2) CREDIT PERIOD.—The term ‘credit period’

20 means, with respect to any eligible public television

21 conversion project, the period of 6 taxable years be22 ginning with the first taxable year the qualified con23 version equipment costs of the eligible taxpayer in

24 connection with such project are taken into account.
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1 ‘‘(3) QUALIFIED PUBLIC BROADCASTING ORGA2 NIZATION.—The term ‘qualified public broadcasting

3 organization’ means—

4 ‘‘(A) a public telecommunications entity, or

5 ‘‘(B) an organization described in section

6 501(c)(3) and exempt from tax under section

7 501(a) and whose exempt purposes include the

8 representation, promotion, or support of public

9 television stations.

10 ‘‘(e) SPECIAL RULE.—A credit shall be allowed under

11 subsection (a) notwithstanding the provisions of section

12 183 (activities not engaged in for profit), section 168(h)

13 (tax-exempt use property), and any provision of law which

14 would limit the allowance of the credit because of the

15 terms of any lease or purchase option between an eligible

16 taxpayer and a public telecommunications entity.

17 ‘‘(f) REGULATIONS.—The Secretary shall prescribe

18 such regulations as may be necessary or appropriate to

19 carry out the purposes of this section, including regula20 tions providing for the ratable recapture of the credit if

21 during the credit period property qualifying for the credit

22 under this section is disposed of or otherwise ceases to

23 be qualified conversion equipment.’’.

24 (b) INCLUSION IN GENERAL BUSINESS CREDIT.—
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1 (1) IN GENERAL.—Section 38(b) of the Internal

2 Revenue Code of 1986 (relating to current year

3 business credit) is amended by striking ‘‘plus’’ at the

4 end of paragraph (11), by striking the period at the

5 end of paragraph (12) and inserting ‘‘, plus’’, and

6 by adding at the end the following:

7 ‘‘(13) the public television digital transmission

8 conversion credit determined under section

9 45D(a).’’.

10 (2) TRANSITION RULE.—Section 39(d) of such

11 Code (relating to transitional rules) is amended by

12 adding at the end the following:

13 ‘‘(9) NO CARRYBACK OF SECTION 45D CREDIT

14 BEFORE ENACTMENT.—No portion of the unused

15 business credit for any taxable year which is attrib16 utable to the public television digital transmission

17 conversion credit determined under section 45D may

18 be carried back to a taxable year ending before the

19 date of the enactment of section 45D.’’.

20 (c) CONFORMING AMENDMENT.—The table of sec21 tions for subpart D of part IV of subchapter A of chapter

22 1 of the Internal Revenue Code of 1986 is amended by

23 adding at the end the following new item:

‘‘Sec. 45D. Credit for public television digital transmission conversions.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years ending after the

3 date of the enactment of this Act.

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