Expanding Broadcast Ownership Opportunities Act of 2021
Bill: H.R.4871 | Sponsor: Rep. Butterfield, G. K. (D-NC)
Policy area: Science, Technology, Communications

Summary:
Expanding Broadcast Ownership Opportunities Act of 2021
This bill requires the Federal Communications Commission (FCC) to take certain actions to increase diversity of ownership in the broadcasting industry and establishes a related tax incentive.
Specifically, the bill requires the FCC to report to Congress regarding (1) recommendations for increasing the total number of broadcast stations that are owned or controlled by members of minority groups or women, (2) the total number of broadcast stations that are owned or controlled by members of minority groups or women, and (3) whether there is a nexus between diversity of ownership or control of broadcast stations and the diversity of the viewpoints expressed on the stations.
In addition, the bill allows companies engaged in the qualifying sale of a broadcast station to receive favorable tax treatment by electing nonrecognition of the gain or loss resulting from the sale. To qualify for this treatment, the sale must result in or preserve ownership and control of a broadcast station by socially disadvantaged individuals.

To direct the Federal Communications Commission to take certain actions 
 to increase diversity of ownership in the broadcasting industry, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Expanding Broadcast Ownership 
Opportunities Act of 2021''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) One of the main missions of the Federal Communications 
        Commission, and a compelling governmental interest, is to 
        ensure that there is a diversity of ownership and viewpoints in 
        the broadcasting industry.
            (2) The Commission should continue to collect relevant data 
        and conduct studies on such diversity, adopt improvements to 
        the data collection and studies, and make appropriate 
        recommendations to Congress on how to increase the number of 
        minority- and women-owned broadcast stations.
            (3) Data from 2017 shows that, of the nearly 1,700 full-
        power 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 the nearly 5,500 
        full-power commercial broadcast radio stations, women owned 
        approximately 7 percent of FM broadcast radio stations, and 
        minorities owned less than 3 percent of such stations.
            (4) Women and minority ownership is 5 to 10 times higher in 
        other industries than in the broadcasting industry.
            (5) During the 17 years that a minority tax certificate 
        program was in place at the Commission (from 1978 to 1995), the 
        Commission issued 287 certificates for radio stations and 40 
        certificates for television stations.

SEC. 3. FCC REPORTS TO CONGRESS.

    (a) Biennial Report Containing Recommendations for Increasing 
Number of Minority- and Women-Owned Broadcast Stations.--Not later than 
180 days after the date of the enactment of this Act, and not less 
frequently than 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.
    (b) Biennial Report on Number of Minority- and Women-Owned 
Broadcast Stations.--Not later than 180 days after the date of the 
enactment of this Act, and not less frequently than every 2 years 
thereafter, the Commission shall submit to Congress a report that 
states 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.

SEC. 4. TAX CERTIFICATE PROGRAM FOR BROADCAST STATION TRANSACTIONS 
              FURTHERING OWNERSHIP BY SOCIALLY DISADVANTAGED 
              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 OWNERSHIP BY SOCIALLY 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:
            ``(1) Sale resulting in or preserving ownership and control 
        by socially disadvantaged individuals.--A sale of an interest 
        in a broadcast station if, immediately following the sale, the 
        station is owned and controlled by socially disadvantaged 
        individuals (regardless of whether the station was owned and 
        controlled by socially disadvantaged individuals before the 
        sale).
            ``(2) Sale by investor in station owned and controlled by 
        socially disadvantaged individuals.--In the case of a person 
        who has contributed capital in exchange for an interest in a 
        broadcast station that is owned and controlled by socially 
        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 provide 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. The limit shall be no higher than $50,000,000.
            ``(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 station must remain owned and 
        controlled by socially disadvantaged individuals. The minimum 
        period shall be no shorter than 2 years and no longer than 3 
        years.
            ``(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 
        disadvantaged individuals.--Requirements for participation by 
        socially disadvantaged individuals in the management of the 
        broadcast station.
            ``(5) Certification.--In the case of a sale described in 
        subsection (b)(1), a requirement that the buyer of the interest 
        in the broadcast station certify, every 6 months during the 
        minimum holding period under paragraph (2), compliance with the 
        rules adopted under paragraphs (2) and (4). The Commission 
        shall report a failure to make the certification required under 
        this paragraph to the Commissioner of Internal Revenue and 
        shall include such failure in the report to Congress under 
        subsection (d) that covers the period during which such failure 
        occurred.
    ``(d) Annual Report to Congress.--The Commission shall submit to 
Congress an annual report describing the sales for which certificates 
have been issued under subsection (a) during the period covered by the 
report.
    ``(e) Definitions.--In this section:
            ``(1) Owned and controlled by socially disadvantaged 
        individuals.--The term `owned and controlled by socially 
        disadvantaged individuals' means, with respect to a broadcast 
        station, that--
                    ``(A) such station is at least 51 percent owned by 
                one or more socially disadvantaged individuals, or, in 
                the case of any publicly owned broadcast station, at 
                least 51 percent of the voting stock of such station is 
                owned by one or more socially disadvantaged 
                individuals, and such individual or individuals have 
                not conferred the right to vote such stock to another; 
                and
                    ``(B) the management and daily business operations 
                of such station are controlled by one or more of such 
                individuals.
            ``(2) Socially disadvantaged individual.--The term 
        `socially disadvantaged individual' means a woman or 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.''.
            (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 expansion.--Not later 
        than 6 years after the date of the 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.
            (4) Examination and report to congress on nexus between 
        diversity of ownership and diversity of viewpoint.--
                    (A) Examination.--Not later than 60 days after the 
                date of the 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.
                    (B) Report to congress.--Not later than 2 years 
                after the date of the 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.
    (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:

        ``PART V--SALE OF INTEREST IN CERTAIN BROADCAST STATIONS

``Sec. 1071. Nonrecognition of gain or loss from 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 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 sale of the interest in the broadcast station 
        fails to meet the requirements of the rules adopted by the 
        Federal Communications Commission under paragraph (2), (4), or 
        (5) 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 first date on which the sale so fails to fulfill 
such requirements.
    ``(c) Basis.--For basis of property acquired on a sale treated as 
an involuntary conversion under subsection (a), see section 1033(b).''.
            (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 relating to part IV the following 
        new item:

``Part V. 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 broadcast stations after the date 
that is 16 years after the date of the enactment of this Act.

SEC. 5. DEFINITIONS.

    In this Act:
            (1) Broadcast station.--The term ``broadcast 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.
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