To amend the Internal Revenue Code of 1986 to provide tax credits for carriage of independent programmers by qualified distributors and multichannel video programming distributors.
Bill: H.R.5056 | Sponsor: Rep. Clarke, Yvette D. (D-NY)
Policy area: Taxation

Summary:
This bill allows a new tax credit for carriage of qualified independent programmers by eligible distributors and multichannel video programming distributors based on license fees and the number of subscribers. The bill defines eligible distributor as any person engaged in the trade or business of a qualified distributor or multichannel video programming distributor and any person engaged in the trade or business of being a virtual multichannel video programming distributor.
The term multchannel video programming distributor is defined in federal regulations as any entity engaged in the business of making available for purchase, by subscribers or customers, multiple channels of video programming. Such entities include, but are not limited to, a cable operator, a BRS/EBS provider, a direct broadcast satellite service, a television receive-only satellite program distributor, and a satellite master antenna television system operator, as well as buying groups or agents of all such entities.
The bill defines qualified independent programmer as a U.S.-based person engaged in the production, creation, or wholesale distribution of three or fewer television channels in which no multichannel video programming distributor, cable programmer, or broadcast network has attributable interest, and includes rural, women, socially disadvantaged, and minority-owned programmers.

To amend the Internal Revenue Code of 1986 to provide tax credits for 
   carriage of independent programmers by qualified distributors and 
              multichannel video programming distributors.

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

SECTION 1. CARRIAGE OF INDEPENDENT PROGRAMMERS TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45U. CARRIAGE OF INDEPENDENT PROGRAMMERS CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, in the case 
of any eligible distributor, the carriage of independent programmers 
credit determined under this section for the taxable year is, with 
respect to each agreement for qualifying carriage entered into by such 
eligible distributor, the lesser of--
            ``(1) the net license fees paid or incurred by such 
        eligible distributor during such taxable year under such 
        agreement for qualifying carriage, or
            ``(2) the product of $0.10 multiplied by the number of 
        subscribers per month to which carriage is provided under such 
        agreement.
    ``(b) Maximum Credit.--The credit determined under this section 
with respect to any eligible distributor for any taxable year shall not 
exceed the product of--
            ``(1) $0.10, multiplied by
            ``(2) 3 times the average number of subscribers of the 
        eligible distributor on days during such taxable year.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Eligible distributor.--The term `eligible 
        distributor' means--
                    ``(A) any person engaged in the trade or business 
                of being a qualified distributor or multichannel video 
                programming distributor, as such term is defined in 
                section 76.1000 of title 47 of the Code of Federal 
                Regulations, and
                    ``(B) any person engaged in the trade or business 
                of being a virtual multichannel video programming 
                distributor.
            ``(2) Agreement for qualifying carriage.--The term 
        `agreement for qualifying carriage' means a written agreement 
        between an eligible distributor and a qualified independent 
        programmer that provides for new or expanded carriage of a 
        qualified independent programmer to at least 40 percent of a 
        subscriber base and which requires the eligible distributor to 
        pay a license fee to the qualified independent programmer.
            ``(3) Qualified independent programmer.--The term 
        `qualified independent programmer'--
                    ``(A) means a United States-based person engaged in 
                the production, creation, or wholesale distribution of 
                three or fewer television channels in which no 
                multichannel video programming distributor, cable 
                programmer, or broadcast network has attributable 
                interest, as such term is defined by section 1000(b) of 
                title 47 of the Code of Federal Regulations, and
                    ``(B) includes rural, women, socially 
                disadvantaged, and minority-owned programmers.
            ``(4) Cable programmer.--The term `cable programmer' means 
        WarnerMedia LLC, The Walt Disney Company, News Corporation, 
        CBSViacom, Inc., Discovery, Inc., Comcast and their managed or 
        controlled subsidiaries, successors, and assigns.
            ``(5) License fees.--Except as otherwise provided by the 
        Secretary, in the case of an agreement for qualifying carriage 
        which is net effective rate positive for the qualified 
        independent programmer, the appropriate amount shall be treated 
        as a license fee paid by the eligible distributor to the 
        qualified independent programmer.
            ``(6) Socially disadvantaged.--The term `socially 
        disadvantaged' with respect to an individual means that the 
        individual 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.
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any amount to the extent that such amount is 
allowed as a credit under this section.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of such Code is amended by striking ``plus'' at the end of 
paragraph (32), by striking the period at the end of paragraph (33) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(34) the carriage of independent programmers credit 
        determined under section 45U.''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

``Sec. 45U. Carriage of Independent Programmers Credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses made or incurred after December 31, 2020, in taxable 
years ending after such date.
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