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House Communications Subcommittee Approves Tax Certificate Bill

The House Communications Subcommittee has agreed on a bill, H.R. 3957, the "Expanding Broadcast Ownership Opportunities Act of 2019, that would restore the minority ownership tax certificate program as a way to help boost diversity in media ownership, but declined to include an incubator program as part of that effort.

It must still be approved by the full Energy & Commerce Committee before it can get a vote in the full House.

That was part of a marathon markup of just short of a dozen communications-related bills in executive session Tuesday (March 10).

The tax certificate gives media companies a tax break for selling a radio or TV station to minorities and thus provides an incentive to do so. He pointed out that after it was instituted in 1978, diverse ownership increased from 40 radio and TV stations combined to 288 radio stations and 43 TV stations in 1995, when it was eliminated by Congress.

Related: NAB's Sutter Says Education, Access Are Keys to Boosting Media Diversity

The voluntary incubator program would incentivize media companies to mentor minorities and women, leveraging those companies' experience and contacts and reputations with creditors. A federal court struck down the FCC's incubator program, which the amendment offered then withdrawn by Rep. Greg Walden (R-Ore.), ranking member of the full Energy & Commerce Committee, would have restored.

NCTA-The Internet & Television Association president Michael Powell, for one, has argued that such access to how and where the deals get made is a key to boosting minority participation in the media.

Rep. G.K. Butterfield (D-N.C), sponsor of the tax certificate bill, cited the court's striking down of the FCC incubator program because it had failed to gauge its impact on women and minorities and nothing in Walden's amendment acknowledged "that defect." But said he was willing to "talk this through," saying it was an issue they both cared about. "You raise some valid points and it is worth exploring. Let's find a way to do it," Butterfield said.

Butterfield's original bill, introduced back in 2017, included the incubator.

In addition to restoring the tax certificate program, which Congress got rid of more than two decades ago, the bill would also require the FCC to make recommendations to Congress of other ways to boost media ownership by women and minority groups and to submit to Congress a report every two years disclosing the total number of stations owned by women and minorities.

Walden said he hoped that before the full-committee vote they could find a way to pas a permanent restoration of the incubator program for both radio and TV. The FCC's program had only applied to radio, but with plans to expand it.

“As longtime supporters of congressional efforts to expand ownership diversity in broadcasting, NAB strongly supports legislation reinstating a tax certificate program to help women and minorities achieve their dreams of station ownership," said NAB EVP Dennis Wharton. "We appreciate Rep. Butterfield’s leadership in crafting this bipartisan, market-based solution to increase TV and radio station ownership diversity. Broadcasters will work with all policymakers on proposals like the tax certificate and incubator programs that provide incentives for access to capital for women and people of color in the broadcast space.”

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.