by both members of minority groups and women, based 
on data reported to the Commission on Form 323. 
SEC. 4. TAX CERTIFICATE PROGRAM FOR BROADCAST STA-
TION TRANSACTIONS FURTHERING OWNER-
SHIP BY SOCIALLY AND ECONOMICALLY DIS-
ADVANTAGED INDIVIDUALS. 
(a) REQUIREMENTS FOR ISSUANCE OF CERTIFICATE 
BY FCC.— 
(1) 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: 
‘‘SEC. 344. TAX CERTIFICATE PROGRAM FOR BROADCAST 
STATION TRANSACTIONS FURTHERING OWN-
ERSHIP BY SOCIALLY AND ECONOMICALLY 
DISADVANTAGED INDIVIDUALS. 
‘‘(a) ISSUANCE OF CERTIFICATE BY COMMISSION.— 
Upon application by a person who engages in a sale of 
an interest in a broadcast station described in subsection 
(b), subject to the rules adopted by the Commission under 
subsection (c), the Commission shall issue to such person 
a certificate stating that such sale meets the requirements 
of this section. 
‘‘(b) SALES DESCRIBED.—The sales described in this 
subsection are the following: 
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‘‘(1) SALE RESULTING IN OWNERSHIP BY SO-
CIALLY AND ECONOMICALLY DISADVANTAGED INDI-
VIDUALS.—A sale— 
‘‘(A) of an interest in a broadcast station 
that, before such sale, is not owned by socially 
and economically disadvantaged individuals; and 
‘‘(B) that results in the station being 
owned by socially and economically disadvan-
taged individuals. 
‘‘(2) SALE BY INVESTOR IN STATION OWNED BY 
SOCIALLY AND ECONOMICALLY DISADVANTAGED IN-
DIVIDUALS.—In the case of a person who has con-
tributed capital in exchange for an interest in a 
broadcast station that is owned by socially and eco-
nomically disadvantaged individuals, a sale by such 
person of some or all of such interest. 
‘‘(c) RULES.—The Commission shall adopt rules for 
the issuance of a certificate under subsection (a) that pro-
vide for the following: 
‘‘(1) LIMIT ON VALUE OF SALE.—A limit on the 
value of an interest the sale of which qualifies for 
the issuance of such a certificate. 
‘‘(2) MINIMUM HOLDING PERIOD.—In the case 
of a sale described in subsection (b)(1), a minimum 
period following the sale during which the broadcast 
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station must remain owned by socially and economi-
cally disadvantaged individuals. 
‘‘(3) CUMULATIVE
LIMIT
ON
NUMBER
OR 
VALUE OF SALES.—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 
(a). 
‘‘(4) PARTICIPATION IN STATION MANAGEMENT 
BY SOCIALLY AND ECONOMICALLY DISADVANTAGED 
INDIVIDUALS.—Requirements for participation by 
socially and economically disadvantaged individuals 
in the management of the broadcast station. 
‘‘(d) ANNUAL REPORT TO CONGRESS.—The Commis-
sion shall submit to Congress an annual report describing 
the sales for which certificates have been issued under sub-
section (a) during the period covered by the report. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) OWNED BY SOCIALLY AND ECONOMICALLY 
DISADVANTAGED
INDIVIDUALS.—The term ‘owned 
by socially and economically disadvantaged individ-
uals’ means, with respect to a broadcast station, 
that— 
‘‘(A) such station is at least 51 percent 
owned by one or more socially and economically 
disadvantaged individuals, or, in the case of any 
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publicly owned broadcast station, at least 51 
percent of the stock of such station is owned by 
one or more socially and economically disadvan-
taged individuals; and 
‘‘(B) the management and daily business 
operations of such station are controlled by one 
or more of such individuals. 
‘‘(2) SOCIALLY AND ECONOMICALLY DISADVAN-
TAGED
INDIVIDUAL.—The term ‘socially and eco-
nomically disadvantaged individual’ means an indi-
vidual who is socially and economically disadvan-
taged. The Commission shall presume that socially 
and economically disadvantaged individuals in-
clude— 
‘‘(A) Black Americans, Hispanic Ameri-
cans, Native Americans, Asian Pacific Ameri-
cans, and other minorities; and 
‘‘(B) women. 
‘‘(3) SOCIALLY DISADVANTAGED INDIVIDUAL.— 
The term ‘socially disadvantaged individual’ means 
an individual who has been subjected to racial or 
ethnic prejudice or cultural bias because of the iden-
tity of the individual as a member of a group with-
out regard to the individual qualities of the indi-
vidual. 
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‘‘(4) ECONOMICALLY
DISADVANTAGED
INDI-
VIDUAL.—The term ‘economically disadvantaged in-
dividual’ means a socially disadvantaged individual 
whose ability to compete in the free enterprise sys-
tem has been impaired due to diminished capital and 
credit opportunities as compared to others in the 
same business area who are not socially disadvan-
taged. In determining the degree of diminished cred-
it and capital opportunities, the Commission shall 
consider, but not be limited to, the assets and net 
worth of such socially disadvantaged individual.’’. 
(2) DEADLINE FOR ADOPTION OF RULES.—The 
Commission shall adopt rules to implement section 
344 of the Communications Act of 1934, as added 
by paragraph (1), not later than 1 year after the 
date of the enactment of this Act. 
(3) REPORT TO CONGRESS ON PROGRAM EX-
PANSION.—Not later than 6 years after the date of 
the enactment of this Act, the Commission shall sub-
mit to Congress a report regarding whether Con-
gress should expand section 344 of the Communica-
tions Act of 1934, as added by paragraph (1), be-
yond broadcast stations to cover other entities regu-
lated by the Commission. 
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(4) REPORT TO CONGRESS ON NEXUS BETWEEN 
DIVERSITY OF OWNERSHIP AND DIVERSITY OF VIEW-
POINT.—Not later than 6 years after the date of the 
enactment of this Act, and not less frequently than 
every 5 years thereafter until the amendments made 
by this section cease to apply in accordance with 
subsection (d), the Commission shall submit to Con-
gress a report, including supporting data, on wheth-
er 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 mat-
ter broadcast by broadcast stations. 
(b) NONRECOGNITION OF GAIN OR LOSS FOR TAX 
PURPOSES.— 
(1) 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: 
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‘‘PART V—SALE OF INTEREST IN CERTAIN 
BROADCAST STATIONS. 
‘‘SEC. 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 cer-
tified 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 sec-
tion, 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 char-
acter subject to the allowance for depreciation under sec-
tion 167, remaining in the hands of the taxpayer imme-
diately after the sale, or acquired in the same taxable year. 
The manner and amount of such reduction shall be deter-
mined under regulations prescribed by the Secretary. Any 
election made by the taxpayer under this section shall be 
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made by a statement to that effect in his return for the 
taxable year in which the sale takes place, and such elec-
tion shall be binding for the taxable year and all subse-
quent taxable years. 
‘‘(b) MINIMUM HOLDING PERIOD; CONTINUED MAN-
AGEMENT.—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 para-
graph), and 
‘‘(2) the taxpayer ceases to fulfill any require-
ments of the rules adopted by the Federal Commu-
nications 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), 
there shall be no nonrecognition of gain or loss under this 
section to the taxpayer with respect to such sale, except 
that any gain or loss recognized by the taxpayer by reason 
of this subsection shall be taken into account as of the 
date on which the taxpayer so ceases to fulfill such re-
quirements. 
‘‘(c) BASIS.—For basis of property acquired on a sale 
treated as an involuntary conversion under subsection (a), 
see section 1033(b).’’. 
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(2) 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: 
‘‘PART V—SALE OF INTEREST IN CERTAIN BROADCAST STATIONS 
‘‘Section 1071. Nonrecognition of gain or loss from sale of interest in certain 
broadcast stations.’’. 
(c) 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 the enactment of this Act. 
(d) SUNSET.—The amendments made by this section 
shall not apply with respect to sales of interests in broad-
cast stations after the date that is 16 years after the date 
of the enactment of this Act. 
SEC. 5. INCUBATOR PILOT PROGRAM. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Commission shall 
establish a program under which the Commission may 
grant a waiver of paragraph (a), (b), or (c) of section 
73.3555 of title 47, Code of Federal Regulations, to a li-
censee of a broadcast station to enable the licensee to ac-
quire an interest that would otherwise be prohibited by 
such paragraph in a broadcast station that is owned by 
socially and economically disadvantaged individuals. 
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(b) REPORT TO CONGRESS.—The Commission shall 
submit to Congress a report on the effectiveness of the 
program established under subsection (a) not later than 
the date that is 4 years after the date on which the Com-
mission establishes the program under such subsection. 
(c) SUNSET.—The Commission may not grant a 
waiver under subsection (a) after the date that is 5 years 
after the date on which the Commission establishes the 
program under such subsection. 
SEC. 6. DEFINITIONS. 
In this Act: 
(1) BROADCAST STATION.—The term ‘‘broad-
cast station’’ has the meaning given such term in 
section 3 of the Communications Act of 1934 (47 
U.S.C. 153). 
(2) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Communications Commission. 
(3) OWNED BY SOCIALLY AND ECONOMICALLY 
DISADVANTAGED
INDIVIDUALS.—The term ‘‘owned 
by socially and economically disadvantaged individ-
uals’’ has the meaning given such term in section 
344 of the Communications Act of 1934, as added 
by section 4. 
Æ 
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